The UAE Ministry of Finance has announced penalties for violations of the new corporate tax rules.
The penalties are as follows:
·
Failure
to file a tax return: A penalty of AED 5,000 for the first offense, AED 10,000
for the second offense, and AED 20,000 for the third and subsequent offenses.
·
Late
filing of a tax return: A penalty of AED 100 per day for each day that the
return is late, up to a maximum of AED 50,000.
·
Failure
to pay tax: A penalty of 10% of the unpaid tax, plus interest at a rate of 12%
per annum.
·
Falsification
of documents: A penalty of AED 50,000, plus imprisonment for a term of up to
five years.
The
penalties will be effective from August 1, 2023. Businesses in the UAE
should be aware of these penalties and take steps to ensure that they are
compliant with the new corporate tax rules.
The UAE
introduced a new corporate tax law in December 2022, which will be enforced on
June 1, 2023. The law sets a corporate tax rate of 9% on taxable profits of
more than AED 375,000 (approximately US$100,000).
Here are
some of the key features of the new corporate tax law:
A flat tax
rate of 9% on taxable profits of more than AED 375,000.
A zero-tax
rate on taxable profits of up to AED 375,000.
A
territorial tax system, meaning that only profits arising in the UAE will be
taxed.
Several
exemptions and deductions, including for research and development, intellectual
property, and foreign dividends.
A
withholding tax of 0% on certain types of UAE-sourced income paid to
non-residents.
Here are
some tips for businesses to avoid corporate tax penalties:
Make sure
that you are aware of the new corporate tax rules and regulations.
File your
tax returns on time and accurately.
Pay your
taxes on time.
Keep good
records of your business transactions.
Get professional
advice from a tax advisor if you are unsure about anything.
By following
these tips, businesses can help to avoid corporate tax penalties and stay
compliant with the law.
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