Ministry of Finance announced a new Dh10,000 fine for those who register for corporate tax late

A new Dh10,000 penalty was announced by the Ministry of Finance on Tuesday for late company tax registration. The purpose of the penalty was to incentivize taxpayers to adhere to tax laws and timely register. The excise tax and value added tax penalties for late registration are correlated with the penalty amount for late tax registration.

Cabinet Decision No. 10 of 2024, which was made public on February 27, modifies the Cabinet Decision No. 75 of 2023's schedule of infractions and administrative fines. The latter detailed the administrative penalties that would be levied for infractions pertaining to the execution of the Corporate Tax Law by the Federal Tax Authority (FTA). These fines become operative on August 1, 2023. On March 1, 2024, the new fine will go into force. 

The actual statute went into force on June 1, 2023. The corporation tax rate in the UAE is among the lowest globally. The law stipulates that businesses making Dh375,000 or more in profit would be subject to a 9% corporation tax.