14% Annual Penalty for Late Tax Payments – Here’s What You Need to Know

The Federal Tax Authority (FTA) in the UAE has emphasized the importance of submitting tax returns and settling tax dues on time. Failure to comply could result in a monthly penalty calculated at an annual rate of 14% on the outstanding amount, starting the day after the payment deadline.

What’s New in Corporate Tax?

The FTA recently announced that over 450,000 companies had registered for the new corporate tax system by December 2024, reflecting a strong response from the business community.

• A 9% corporate tax rate is applied to businesses earning more than AED 375,000 annually, effective June 1, 2023.
• Businesses earning below this threshold are taxed at a 0% rate.

Tips to Ensure Tax Compliance:

1. Verify Your Records: Double-check the accuracy of all registered information, including your legal entity type, as it affects tax filing requirements.
2. Meet Deadlines: Submit your tax returns and settle dues within the specified timeline to avoid administrative penalties.
3. Leverage the ‘EmaraTax’ Platform: This digital service allows you to register, file tax returns, and pay dues seamlessly and efficiently, 24/7.

Why Compliance Matters Now More Than Ever

Staying compliant with tax laws isn’t just about avoiding penalties; it’s about building trust and credibility in the marketplace. Companies that maintain accurate records and meet their obligations on time position themselves as reliable partners to clients, investors, and stakeholders.

Expert Tip:

Stay informed and review the FTA's guidelines and legislation regularly. If you need professional assistance, our tax experts are here to help you navigate compliance requirements and avoid penalties.

?? Contact us today for tailored tax solutions and ensure your business stays compliant with ease and confidence.