Timelines for Corporate Tax registration specified

The UAE CT Law requires all Taxable Persons and certain categories of Exempt Persons (e.g. Qualifying Public Benefit entity, Qualifying Investment Fund) to register for Corporate Tax (CT) with the Federal Tax Authority (FTA) in order to obtain a Tax Registration Number (TRN).

The FTA had earlier issued Decision No. 7 of 2023 stating the timelines for obtaining CT registration and applying for exemption for certain categories of Exempt Persons under the UAE CT Law.

The FTA has now issued Decision No. 3 of 2024 specifying the timelines for making an application for CT registration in the case of all Taxable Persons under the UAE CT Law and also amended the Cabinet Decision No. 75 of 2023 (vide Cabinet Decision No. 10 of 2024) in order to specify the administrative penalty in case of failure to comply with the timelines.

1. Taxable Resident Person to refer to the date of License issuance irrespective of the year of issuance.
Where a Resident Juridical Person has more than one License (e.g. in case of a UAE LLC with a UAE branch or an LLC having separate trading and service License), the License with the earliest issuance date shall be considered for determining the timeline.

2. Non-Resident Persons earning only State Sourced Income that do not have a PE or nexus in the UAE do not need to register for UAE CT (Ministerial Decision No. 43 of 2023).

3. It is currently not clear how the ‘date of existence’ of the PE is required to be determined. e.g. in the case of a Fixed Place PE, whether the relevant date is when the PE related activities were initiated or when the 6 months threshold is exceeded.

4. Non-Resident Person shall have a nexus in the UAE if it earns income from any immovable property in the UAE (Cabinet Decision No. 56 of 2023).

5. Natural Person conducting Business or Business Activities shall be required to register for UAE CT only where the total turnover derived from such Business or Business Activities exceeds AED 1 million in a Gregorian calendar year.

An administrative penalty of AED 10,000 shall be imposed in case of failure to submit a CT registration application within the timelines specified.

• The guidance provided in the FAQs on the UAE CT regime with respect to registering for UAE CT before filing of the first CT return has now been clarified by the FTA Decision. It should be noted that the deadline is for submission of the registration application and not for obtaining the registration number.
  
• Taxpayers need to make sure that a valid License is uploaded and accepted on the EmaraTax (FTA) portal before proceeding to make the registration application.
• Though this does not seem to be the intention, there may be a situation where a Non-Resident Juridical Person existing as on 1 March 2024 and following a July – June financial year may have the due date for submitting the CT registration application as 31 March 2024 (i.e. , 9 months from 1 July 2023).
• There is no change in the deadline for registration of tax groups.

All Taxable Persons should ascertain their due date to submit the CT registration application in order to avoid non-compliance and penal implications. Resident Juridical Persons having multiple establishments or Licenses will be required to refer to the License with the earliest issuance date to assess the applicable due date.

The EmaraTax (FTA) portal for obtaining CT registration is now available to all persons.

KPMG has a dedicated team to help your business register for CT in the UAE.