New Penalty Announcement
The Federal Tax Authority (FTA) has announced a 14% monthly penalty for corporations failing to pay their due corporate tax. This penalty applies to the unpaid tax amount and begins accruing from the day after the payment deadline.
Calculation of the Penalty
Taxpayers will incur this penalty for each month or part of a month that the tax remains unpaid. The penalty accrues on the same date each subsequent month, significantly increasing the financial burden on non-compliant corporations.
Payment Deadline Details
According to FTA guidelines, the due date for corporate tax payments is no later than nine months after the end of the relevant tax period. This regulation falls under Federal Decree-Law No. 47 of 2022 regarding Corporate Tax and its amendments.
Conclusion
Corporations in the UAE must prioritize timely payment of corporate taxes to avoid substantial penalties. The FTA’s enforcement of this 14% monthly charge emphasizes the importance of compliance within the new corporate tax framework.
