Under Article 51 of Federal Decree Law No. 47 of 2022, known as the “Taxation of Corporations and Businesses” (UAE CT Law), taxable entities are required to register. The Federal Tax Authority (FTA) is empowered to set the registration timelines for all taxable persons.
The FTA issued Decision No. 3 of 2024, outlining the necessary registration deadlines, which are likely to be effective from 1st March, 2024. On 4th June 2024, the FTA released a ‘Corporate Tax Public Clarification’ titled “Registration Timelines for Taxable Persons for Corporate Tax”. It presents taxable persons with detailed timelines for submitting their tax registration applications. As a part of the clarification, the FTA has given examples to help taxpayers adhere to the prescribed timelines.
For all taxable entities, it’s imperative to register with the FTA by the specified deadlines. In case of non-compliance, they need to shell out AED 10,000 as an administrative penalty for late submissions. Depending on the type of taxable person, the deadlines in FTA Decision No. 3 vary.
- Natural Person
- Non-Resident Juridical Person
- Resident Juridical Person
Analysis
A. Resident Juridical Person
Incorporated or Established Before 1st March 2024
A juridical person incorporated or recognized before 1st March 2024 must submit a Tax Registration application based on the month of the issuance of their license, within the deadlines specified in FTA Decision 3 of 2024, regardless of whether the license is valid or expired.
Example: Company X possessed a license that expired on 31 March 2022.
Company X, being a Resident Person incorporated in the UAE, must submit its Tax Registration application referencing the month of the issuance of its license. Although the license expired, the application for Corporate Tax registration must reference April, with a submission deadline of 30 June 2024.
Incorporated or Established on or After 1st March 2024
For juridical persons newly incorporated or recognized in the UAE on or after 1st March 2024, a Tax Registration application must be submitted within three months of their incorporation, establishment, or recognition.
Example: Company Y, incorporated on 16 June 2024 in Sharjah, is a Resident Person because it was established in the UAE. Since it was incorporated after 1st March 2024, the company must submit its Tax Registration application by September 16th, 2024, which is within three months of its date of incorporation.
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Juridical Person with POEM in the UAE Before 1st March 2024
A juridical person incorporated or recognized abroad but managed and controlled (POEM) in the UAE is considered a Resident juridical person under UAE CT Law. In case such a person doesn’t hold a license as of the effective date of FTA Decision 3 of 2024, it’s imperative to submit a Tax Registration application within three months from that date, which is by 31st May 2024.
Example: Company Z, incorporated on 1 April 2019 in the UK, has had its POEM in the UAE since 1 April 2022. It is a Resident Person as of 1 June 2023 due to its POEM in the UAE. Since it is a Resident Person before 1 March 2024, Company Z must submit a Tax Registration application referencing its date of license issuance.
Given that Company Z doesn’t hold a UAE licence since its board meetings are only conducted in the country, it needs to submit its application for Tax Registration within 3 months of the effective date of FTA Decision No. 3 of 2024, which is by 31 May 2024.
Juridical Person with POEM in the UAE After 1st March 2024
A juridical person incorporated, established, or recognized under foreign legislation but with POEM in the UAE on or after 1st March 2024, must submit a Tax Registration application within three months from the end of its financial year.
Example: Company A, incorporated on 1 April 2024 in Germany, follows a financial year from April to March. All its strategic decisions and board meetings and 2024 and 2025 are organized in the UAE.
Company A is a Resident Person due to its POEM in the UAE for the financial year that ends on 31 March 2025. Since Company A became a Resident Person in the UAE after 1 March 2024, it needs to submit a Tax Registration application within 3 months from the end of its financial year. This deadline has been fixed on 30 June 2025.
Key Considerations
If a juridical person holds an expired license which is not yet cancelled as of 1 March 2024, they should submit their Tax Registration application based on the month of the original license issuance.
If a juridical person holds multiple licenses as of 1 March 2024, they should use the license with the earliest issuance date to determine deadline of the Tax Registration application. The earliest issuance date should be based on the year of license issuance, but only the month of issuance is relevant for deciding the deadline.
Determining whether or not a juridical person is effectively managed and controlled in the UAE requires an assessment of the specific circumstances and facts of the entity and its activities.
B. Non-Resident Juridical Persons
Non-Resident Juridical Person with a PE in the UAE Pre-1st March 2024
For a Non-Resident Juridical Person having a Permanent Establishment (PE) in the UAE before 1st March 2024, the CT Registration application deadline is within 9 months from the recognition of the PE for CT purposes in the UAE. This timeline may be extended if an International agreement on Double Taxation Avoidance (DTAA) stipulates a longer duration for PE recognition in the UAE, in which case the provision of the DTAA remains valid.
Example: Company B, established on 15th July 2008 in the UAE (FY from June to May), established a branch in Dubai on 01 May 2023. The company falls under CT regulations from 01 June 2023 (as per UAE CT Law, effective from this date).
Assuming all PE criteria are met, the permanence of PEs in the UAE is assessed over a six-month period, ending on 01 December 2023.
Non-Resident Person with a PE in the UAE On or After 1st March 2024
In case a Juridical Person has a Permanent Establishment (PE) in the UAE, the deadline to submit a CT Registration application is within 6 months from the recognition of the PE for UAE CT purposes. Also, if a Double Taxation Avoidance Agreement (DTAA) extends the duration for recognizing a PE in the UAE, the provision of DTAA remains valid.
Example: Company C, incorporated on 22 October 2019 in Luxembourg, established a branch in Abu Dhabi on 01 July 2024. Considering that it met all other PE requirements, the permanence of the PE in the UAE is evaluated over a six-month period, concluding on 01 January 2025.
Therefore, the PE recognition date for Company C is 01 January 2025 (6 months from 01 July 2024). The company must submit its CT Registration application within 6 months from the recognition date of the PE, by 01 January 2025. Therefore, the due date for CT Registration is 01 July 2025.
Non Resident Person having nexus in the UAE prior to 01 March 2024
For a Non-Resident Juridical Person having a nexus in the UAE where it derives its income from Immovable Properties in the country, the due date to file the CT Registration application will be from 3 months from the effective date of FTA Decision no. 3 of 2024.
Example: Company D was incorporated on 3 January 2024 in Oman, and it purchased residential property for investment purposes in Dubai on 10 January 2024. On 15th February, the company rented out the property. Company D does not have a Permanent Establishment in the UAE. In this case, it will be considered as a Non-Resident Person because Company J is a Non-Resident Person because it is not a Resident Person and has a nexus in the UAE. Even though it purchased the property on 10th January 2024, it had no income from it till February 15th. Therefore, its nexus in the UAE is considered to be on 15th February 2024.
Company D, being a Non-Resident Person with a nexus in the UAE before 1st March 2024, should have submitted its Tax Registration application within 3 months from the effective date of FTA Decision No. 3 of 2024, on 31 May 2024.
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Non-Resident Person with Nexus in the UAE After 1st March 2024
C. Natural Person (Resident and Non-Resident)
For a Resident Natural Person with a business turnover exceeding AED 1 million during a Gregorian calendar year in the UAE, the deadline to submit a Tax Registration application is by 31 March of the subsequent Gregorian Calendar Year (starting from 1 January 2024).
A Non-Resident Natural Person with a business turnover from a Permanent Establishment (PE) in the UAE exceeding AED 1 million during a Gregorian calendar year needs to submit the application within 3 months of fulfilling the requirements for which the entity needs to pay Corporate Tax.
Example: Mr. X is considered a tax resident in Spain as per an international double taxation avoidance agreement between the two countries. However, he travels to the UAE from 27th January 2024 to carry out business as an independent IT consultant. Thus, he creates a PE in the country as per the applicable international agreement to avoid double taxation. The business turnover for Mr. X in the 2024 Gregorian calendar year amounts to AED 1.2 million, which exceeds the AED 1 million threshold on 10th November 2024.
As a Non-Resident Natural Person, Mr. B meets the requirements of being subject to Corporate Tax with a turnover of AED 1.2 million from a PE in the UAE. Thus, he needs to submit his Tax Registration application within 3 months of fulfilling the criteria of being subject to Corporate Tax. Calculating 3 months from 10th November 2024, this date comes to 10th February 2025.
Points to Remember
- If a Non-Resident Juridical Person has both a PE and a nexus in the UAE, the due date of the CT registration application is the earlier of the two deadlines
- If a Double Taxation Avoidance Agreement (DTAA) extends the duration for recognizing a PE in the UAE, the DTAA provision remains valid
