59A7D41EB44EABC4F2C2B68D88211BF4 U.A.E Visa Rules and Procedures-Law updates -free legal advice: U.A.E Announced Penalties for The New Corporate Tax Rules from First of August

Sunday, July 30, 2023

U.A.E Announced Penalties for The New Corporate Tax Rules from First of August

 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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