Businesses in UAE now have a nine-month window to ensure that their corporate tax filings are in order

Businesses now have a nine-month window to ensure that their corporate tax filings are in order, thanks to the UAE Ministry of Finance establishing the penalty structure for non-compliance. The nine-month timeframe will correspond to the fiscal year that a certain firm follows. 

So, for example, If the firm establishes its yearly financials from January 1 to December 31, it will have until September of the following year to file its tax filings. If the fiscal year of the firm spans from June 1, 2023 to May 31, 2024, the application date is February 20, 2025. The severity of each violation's penalty will be disclosed later.

The UAE finance ministry defines administrative penalties for company tax infractions in statements published Saturday (July 29). They take effect on August 1. According to the statement, the fines have been "carefully designed and benchmarked to ensure successful implementation and compliance."

Simultaneously, it is done 'without burdening UAE firms'. "Adhering to corporate tax compliance is a responsibility of all taxable persons to support the system's implementation in the UAE," Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, stated.

The penalty might vary from Dh1,000 to Dh2,000, or 2-4 percent of the tax owing (similar to VAT-related penalties), according to tax audit sources. If a penalty is levied, the company can "first file a reconsideration request against a tax assessment, including penalties," according to Jain. "The taxpayer may file an objection with the Tax Dispute Resolution Committee (TDRC) based on the decision of the reconsideration request."