As a significant move, UAE FTA has implemented penalties for the Corporate Tax violations, ensuring the compliance with the tax regulations. These penalties are key part of the UAE’s broader efforts to strengthen its tax framework, ensuring businesses contribute fairly to the country’s economy. By taking strong step on corporate tax violations, UAE encourages businesses to meet their obligations on time, thereby maintaining a smooth and efficient tax collection system. These penalties are outlined for the taxpayers, who fails to fulfil his Corporate Tax Responsibilities and ensuring the compliances with the Federal Decree -Law No 47 of 2022 on Corporate Tax.
Key Highlights of the New Penalties:
- Companies that fail to pay the correct corporate tax by specified deadline will incur a penalty of 14% per annum on an outstanding amount, which shall be calculated monthly.
- The penalty starts accruing the day after the payment deadline and continues to accumulate on the same date each month until the outstanding tax is settled in full.
- The due date for corporate tax payments is not later than nine months after the conclusion of the relevant tax period.
