Navigating Corporate Tax Penalties in the UAE

The United Arab Emirates (EAU) has a favorable fiscal environment for companies, with their low corporate tax rates and numerous incentives that attract companies around the world. However, like any jurisdiction, the EAUs have their set of rules and regulations that govern corporate taxes, including fines for breach. Understanding these sanctions is crucial for companies that operate in the EAU to avoid possible financial and legal repercussions. In this blog post, we will deepen several applications of corporate tax sanctions in the EAU.

1.:

● Companies must be registered for the corporate tax based on their month of incorporation (regardless of the year) according to the following timeline given by the FTA:

1. January 1 to February 28/29 – May 31, 2024
2. March 1 to April 30 – June 30, 2024
3. May 1 to May 31 – July 31, 2024
4. June 1 to June 30 – August 31, 2024
5. July 1 to July 31 – September 30, 2024
6. August 1 to September 30 – October 31, 2024
7. October 1 to November 30 – November 30, 2024
8. December 1 to December 31 – December 31, 2024
9. For natural persons on March 31 of next year since the year they reach the threshold of 1 million and register for CT

2. Do not keep records:

● Companies must maintain financial and accounting records such as guidelines.

● Failure results in a fine of 10,000 AED.

● Repeated crimes within 24 months incur a fine of 20,000 AED.

3. Do not inform amendments to the information sent:

● Notify the authorities immediately the necessary updates.

● The violation leads to a penalty of 1,000 AED.

● Repeating the violation within 24 months incurs a fine of AED 5,000.

4. Do not send requested information in Arabic:

● Entities must provide relevant data or documents in Arabic.

● The fine for non -compliance is AED 5,000.

5. Notification of appointment of legal representative:

● Not notifying the authorities about a legal representative appointment is a violation and can lead to corporate tax sanctions as decided by the FTA.

The navigation of corporate tax sanctions in the EAU requires an integral understanding of fiscal regulations and diligent compliance efforts. When complying with fiscal laws, the maintenance of precise records and cooperate with the tax authorities, companies can minimize the risk of corporate tax sanctions and contribute to a business environment in the EAU.

In the accountant table we provide an accounting and tax notice according to the requirements of your company. We can help you register your company for corporate taxes in the EAU. Our dedicated team will provide all the necessary orientation so that you can avoid any penalty on the corporate tax. To obtain information, you can communicate with us at info@accountantsbox.com.