Introduction
With the enforcement of Federal Decree-Law No. 47 of 2022, corporate tax registration has become a critical compliance requirement for all taxable persons, including non-resident juridical entities. The FTA Decision No. 3 of 2024, effective from March 1, 2024, outlines the timelines for these registrations. This article focuses on the specific requirements for non-resident juridical persons.
Non-Resident Juridical Persons
Non-resident juridical persons must register based on the establishment of a Permanent Establishment (PE) or a nexus in the UAE. The deadlines differ depending on whether the entity became a non-resident person either prior to or after March 1, 2024.
Prior to March 1, 2024
For entities with a PE or nexus in the UAE before March 1, 2024, the registration application must be submitted based on the following criteria:
- Permanent Establishment: Registration is required within nine months from the date the PE is recognized.
- Nexus: Registration is required within three months from the effective date of FTA Decision No. 3 of 2024 (by May 31, 2024).
Examples
- Company G: Incorporated in the USA, opened a Dubai branch on May 1, 2023, fulfilling PE conditions by December 1, 2023, must register by September 1, 2024.
- Company H: Incorporated in the UK, began a construction project in Dubai on August 1, 2023. However, due to the international agreement for avoidance of double taxation between UK and UAE, construction projects will be deemed to have a PE if it lasts more than 12 months. Therefore, the Company will be not required to register.
On or After March 1, 2024
For entities becoming non-resident persons on or after March 1, 2024, the registration deadlines are as follows:
- Permanent Establishment: Registration is required within six months from the PE recognition date.
- Nexus: Registration is required within three months from establishing the nexus.
Examples
- Company K: Incorporated in Luxembourg, opened an Abu Dhabi branch on July 1, 2024. However, the requirements to have a PE was fulfilled on 1st January 2025. Therefore, the company must register by July 1, 2025, following six months of meeting the requirements for PE establishment.
- Company L: Incorporated in Saudi Arabia, purchased a commercial property in the UAE on April 7, 2024, must register by July 7, 2024, upon establishing a nexus.
Conclusion
Non-resident juridical persons must be diligent in identifying their PE or nexus status and adhering to the specific registration timelines to avoid administrative penalties. FTA Decision No. 3 of 2024 provides a comprehensive framework to ensure compliance with the UAE’s corporate tax regulations.
Summary
This article discusses the corporate tax registration timelines for non-resident juridical persons in the UAE following the enforcement of Federal Decree-Law No. 47 of 2022 and FTA Decision No. 3 of 2024. It outlines registration requirements based on the establishment of a Permanent Establishment (PE) or nexus in the UAE and provides examples for entities before and after March 1, 2024. For entities prior to this date, registration deadlines vary depending on PE recognition, while for those on or after March 1, 2024, deadlines are based on PE recognition or nexus establishment. The article emphasizes the importance of compliance to avoid penalties and highlights the framework provided by FTA Decision No. 3 of 2024 for corporate tax regulation compliance in the UAE.
Disclaimer:
The Content offer general guidance and should not be considered legal, financial, or tax advice. Consult qualified professionals for personalized guidance. While efforts have been made to ensure accuracy, no guarantee is provided for completeness or applicability to individual situations. Users are responsible for their interpretation and actions based on this information, at their own risk.
For understanding more about Corporate Tax, VAT Updates, Tax Law and Registration reach out to us on: info@acme-group.me | +971527972066.
This article was published on 18 June 2024.
Related Posts
Understanding Registration as a Tax Group in UAE
As the UAE continues to refine its tax regulations, understanding the nuances of registration as a Tax Group becomes increasingly important for …
Understanding Withholding Tax Under the Income Tax Law (Part 1)
Insights from Law No. (24) of 2018 The landscape of income taxation in the Qatar has transformed significantly with the introduction of …
Characterization of Distributors in The UAE on Transfer Pricing
The landscape for businesses operating within UAE underwent a significant shift in June 2023, once the Corporate Tax Law came into effect …
Understanding Persons Liable to Pay Tax in UAE
Excise Tax: Federal Decree-Law No. 7 of 2017 (Federal Decree-Law No. 19 of 2022) On November 6, 2023, the UAE Cabinet issued Decision …
Strategic Step Towards Economic Transformation
On December 9, 2022, the United Arab Emirates (UAE) took a significant step in its economic evolution by issuing Federal Decree-Law No. …
Join our Newsletter!
Receive updates on the latest News, Events, Webinar and more.
WhatsApp/Call
+971 52 797 2066
Email Us
info@acme-group.me
Website
acme-group.me