Liquidation of a Company and Corporate Tax Compliance

Corporate Tax Compliance for Businesses in Liquidation?

This newsletter addresses the importance of Corporate Tax (CT) compliance for businesses undergoing liquidation in 2024.

Key Points:

• Registration Requirement: All taxable persons, including those in liquidation, are required to register for CT with the Federal Tax Authority (FTA) by the designated deadline outlined in FTA Decision No. 3 of 2024.
• Compliance Regardless of Business Status: This registration requirement applies even if a business has ceased operations or is in the process of liquidation after the commencement of its first Tax Period.
• Deregistration Process: Businesses with cancelled licenses must follow the CT deregistration process:
• Deadline: Submit the deregistration application within 3 months of license cancellation. (e.g., application due by May 2024 for a cancellation on Feb 28, 2024)Final Tax Return: File a final tax return within 9 months of receiving pre-approval for deregistration. This return covers the period from the start of the fiscal year to the cancellation date.

Compliance is Essential:

Failure to register for CT within the stipulated timeframe can result in an administrative penalty of AED 10,000.

Ensuring Smooth Liquidation:

• Submit the deregistration application within the 3-month window.
• File the final tax return within 9 months of pre-approval.
• Settle all outstanding tax liabilities and penalties promptly.
• Maintain all relevant financial records and supporting documents.

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Should you have any queries or require assistance throughout this process, please do not hesitate to reach out. You can contact us at?[email protected]?or +971 56 511 1912.