Are you a business owner in the UAE? Want to stay compliant and avoid fines? We’ve got you covered! The Federal Tax Authority (FTA) has announced a new grace period for businesses that have not yet updated their tax registration.
Ensure your company remains compliant by updating your tax registration and take full advantage of this opportunity. Let’s dive into how this grace period can benefit you.
Corporate Income Tax Registration
Corporate tax is a direct tax imposed on the net income or profit of corporations and other businesses. In the UAE, corporate tax aligns the country’s policies with international standards while supporting sustainable economic growth.
Who Needs to Register for Corporate Tax?
Corporate tax applies to companies operating within the UAE, foreign entities with a significant presence in the UAE, and free zone entities (subject to qualifying conditions).
New Grace Period for Tax Registration Updates
The UAE Federal Tax Authority (FTA) has announced a new grace period for companies that haven’t updated their tax records. This grace period runs from January 1, 2024, to March 31, 2025, allowing businesses to update their records without incurring fines or penalties.
Issue and Compliance Requirements
Staying compliant with FTA rules and regulations requires businesses to update all necessary tax registration information. Key requirements include:
- Legal Name: The name as per the trade license or registration certificate.
- Trade License: A valid trade license issued by a UAE authority.
- Owner’s Identification: Emirates ID (for residents) or passport copy (for non-residents).
- Contact Information: Business address, contact number, and email.
- Tax Identification Number: Existing tax numbers (e.g., VAT or corporate tax).
- Business Activities: The trade license you obtain determines the business activities you can practice.
- Bank Details: UAE bank account details for financial transactions.
- Proof of Authorized Signatory: Documents like a power of attorney or board resolution.
- Financial Records: Recent audited financial statements or bank statements.
- Corporate Documents: MOA or AOA for corporations.
- Previous Tax Filings: Copies of prior tax filings or certificates if applicable.
Administrative Penalties for Not Updating Tax Records
Failure to update records within the prescribed period can result in penalties ranging from AED 1,000 to AED 10,000. However, these penalties are currently waived during the grace period. This initiative aims to improve tax record accuracy and ease the burden on businesses behind in reporting changes. Take advantage of this grace period to ensure compliance and avoid future penalties.
How to Avoid Penalties on Your Tax Registration
To stay compliant and avoid fines, regularly review and update your tax records, stay informed about FTA guidelines and deadlines, and work with a tax consultant for expert assistance. Timely updates are essential to maintaining a good standing with the FTA.
How Can Business Link Support You with Tax Registration?
Feeling overwhelmed by the tax registration process? Business Link is here to guide you.
With over 15 years of experience, Business Link has helped more than 40,000 clients establish their businessesin the UAE and KSA and achieve their dreams. As the leading business setup consultant in Dubai, we provide end-to-end assistance with tax registration and compliance, ensuring a hassle-free experience while you focus on growing your business.
Contact Business Link today to begin your tax registration journey effortlessly and ensure your business’s compliance.
