Administrative Penalties Under Corporate Tax In UAE

By Deepak Kokal   18 September, 2023

UAE is famous for being a business-friendly environment. However, as part of its commitment to enhance the tax system and align with global best practices, the UAE has introduced Corporate Tax.

Ministry of Finance (MoF) UAE has announced vide the Cabinet Decision No. (75) of 2023, the following administrative penalties for violations related to the application of Federal Decree Law No. (47) of 2022 on the taxation of corporations and businesses w.e.f. 1st August 2023.

Penalties will be imposed on taxable person, whether an individual or a legal entity, who fails to comply with their obligations under the UAE Corporate Tax Law.

Registration & De-registration Penalties in the UAE

• Late Corporate Tax Registration - 10,000 AED

• Late Corporate Tax De-registration within specified timeframe - 1,000 AED for Late submission of application and on the same date monthly, up to maximum of 10,000 AED

 

Legal Representative Penalties in the UAE

• Failure of the legal representative to provide notification of their appointment within the specified timeframes, the penalties will be due from the legal representative's own funds - 1,000 AED

• Failure of the legal representative to file a tax return within the specified timeframes, the penalties will be due from the legal representative's own funds - 500 AED p.m. or part thereof, for the first 12 months and 1,000 AED p.m. or part thereof, from 13th month & onwards

The penalty will be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted.

 

Compliance

• Failure to submit a tax return within specified timeframe - 500 AED p.m. or part thereof, for the first 12 months and 1,000 AED p.m. or part thereof, from 13th month & onwards

The penalty will be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted.

 

Records & Information under Corporate Tax Law:

• Failure to keep records and information required. specified timeframe - 10,000 AED for each violation, and 20,000 AED in each case of repeated violation within 24 months from the date of last violation

• Failure to submit data, records, and documents in Arabic to authority when requested - 5,000 AED

• Failure to inform amendments of the information related to their tax records kept by the Authority - 1,000 AED for each violation, and 5,000 AED in each case of repeated violation within 24 months from the date of last violation

 

It is always important for businesses and corporations to ensure tax compliance with regulations to avoid the above administrative penalties. Tax payers should be aware of the corporate tax penalties in the UAE and take steps to avoid them. This includes ensuring that they are properly registered for corporate tax, keeping up-to-date records, and submitting accurate tax returns on time.

 

We, at IFC, are committed to provide Corporate Tax services to comply with the law and keep updated on the developments to avoid financial hardship of the business.

 

To find out more related to corporate tax, send us an email on hello@ifcgroup.co or explore our corporate tax services.