Ministry of Finance experts on tax policies – Shabana Begum, Executive Director of Tax Policy Sector, Fatima AlSheikh, Director of Tax Policies and Legislation, Rasha Hajj Hussein, Tax Policies and Legislation Expert, and Chris Searing, Tax Policy Sector Specialist at a Corporate Tax awareness session in Sharjah.
Ministry of Finance experts on tax policies, Shabana Begum, Executive Director of Tax Policy Sector; Fatima AlSheikh, Director of Tax Policies and Legislation; Rasha Hajj Hussein, Tax Policies and Legislation Expert; and Chris Searing, Tax Policy Sector Specialist, at a corporate tax awareness session in Sharjah. Image Credit: Supplied

Sharjah: UAE authorities have urged all eligible entities to register for corporate tax as soon as possible, as it would give them ample time to comply with all legal requirements.

During a public awareness session held at the Sharjah Chamber of Commerce and Industry, a Ministry of Finance official said eligible taxable parties (public joint stock companies and private companies) should register with the Federal Tax Authority (FTA) and obtain a tax registration number at the earliest, adding that authorities were anticipating a surge in registrations in the upcoming weeks and months.

While there are no penalties for late registration at the moment, the official cautioned that taxpayers must register in the system to avail of certain reliefs, file their taxes on time, and make prompt payments. Delaying registration would only be detrimental to their interests, the official told Gulf News.

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Compliance deadline

The official clarified that the compliance deadline allows taxpayers a generous time-frame of up to 21 months from the start of their financial year to prepare and fulfil their tax obligations. For instance, businesses with a financial year commencing on June 1, 2023, and concluding on May 31, 2024, will have to submit corporate tax returns and make payments from June 1, 2024, until February 28, 2025.

For businesses with initial tax periods beginning on January 1, 2024, and ending on December 21, 2024, the tax returns and payments deadline will fall between January 1 and September 30, 2025. Taxable entities can register on the EmaraTax digital tax services platform.

Small businesses also have to register

Shabana Begum, Executive Director of Tax Policies Sector, said: “We are now in the period where corporate tax is in force. The gaps (in the policy) which we saw in the law in December have been filled out.”

Commenting on the decision related to relief for small businesses and micro enterprises, she said: “This is a huge change for the country in terms of a corporate tax regime coming into force. We want to make sure these specific (SMEs) businesses are not disrupted. What we will have for these businesses is a very minimal compliance requirement. However, the requirement for registration for small businesses is absolutely there, provided they meet the conditions of having no taxable income in a period.”

Shabana said important facets of the tax law also include the formation of a tax group that allows businesses to file a single tax return for all group entities on a consolidated basis, and ‘participation exemption’ which aims to prevent domestic and international double taxation.

The next phase

The UAE corporate tax law, which levies a 9 per cent tax rate on income of certain businesses that exceed Dh375,000, came into force on June 1. In the next phase, FTA will be responsible for the administration, collection and reinforcement of the law.

Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, said the ministry is now focused on providing clarifications and guidance to businesses on the most critical decisions relating to corporate tax. These include small business relief, tax groups, and interest-capping rules. “The focus will be on promoting accounting transparency, easing compliance burden for small businesses and start-ups, reinforcing anti-abuse rules, avoiding double taxation, and determining taxable income,” he added.