Can UAE Businesses Pay Corporate Tax in Installments? Here's What You Need to Know

With the enforcement of the UAE corporate tax law under Federal Decree Law No. 47 of 2022, all registered businesses must pay their corporate tax dues and make payments in accordance with the UAE Federal Tax Authority. Every business should plan its finances properly to meet UAE corporate tax deadlines. The UAE Federal Tax Authority expects corporate tax payments to be made in full before the due date, while many business owners may ask: Whether corporate tax payments can be made in installments. But the UAE FTA only provides an installment option for settling administrative penalties if certain criteria are met.

Let us watch out for how businesses in the UAE handle corporate tax payment, understand installment options, and ensure full compliance with UAE FTA guidelines.

Your Guide to UAE Corporate Tax Registration and Compliance

Every taxable business in the UAE must ensure completion of corporate tax registration with the UAE FTA as per the UAE corporate tax law, effective June 1st, 2023. Corporate tax registration in UAE is charged on the company’s net profit earned by the business within the country.

Points to remember for corporate tax registration in the  UAE:

Tax Rates:

• 0% on taxable income up to AED 375,000
• 9% on taxable income exceeding AED 375,000

Who is Eligible?

• Every business operating in the UAE must register for corporate tax, even if its income is below the taxable threshold.
• Free Zone entities can benefit from a 0% rate if they qualify as a QFZP under the UAE FTA guidelines.
• Both the Mainland and Free Zone companies are subject to UAE Corporate tax and have to pay corporate tax in the UAE as per applicable rates.

Requirement to register for corporate tax:

• Registration with the UAE FTA is compulsory even if there is no tax due or applicable rate is 0%.
• Non-registration or late compliance may lead to serious penalties.

Are UAE Businesses Allowed to Pay Corporate Tax in Instalments?

Taxpayers in the UAE are mandated to pay corporate tax  in full full before the deadline prescribed by the UAE FTA. The UAE’s Federal Tax Authority (FTA) does not provide an installment option for corporate tax payments that exceeds beyond the CT payment due date. The businesses may however make mutiple payments towards it CT dues but same must be completed before deadline to avoid delay penalties.

The UAE FTA grants partial payment options for administrative penalties. This measure offers financial relief to ease the burden of penalty payment but offers no installment relief for main corporate tax payment.

How Can Businesses Pay Corporate Tax in the UAE?

Taxpayers in the UAE can pay corporate tax conveniently through UAE FTA’s Emaratax portal and file corporate tax returns in the UAE. The corporate tax liability is determined or calculated on taxable income i.e.  0% corporate tax for income below AED 375000 and 9% corporate tax for taxable income above AED 375000

Businesses have various options to make corporate tax payments such as e-dirham, bank transfer (GIBAN) and card payment.

Make sure to pay the corporate tax in the stipulated timeline to ensure compliance with UAE corporate tax. Payment within the due date can prevent penalties and keeping UAE FTA payment records helps in compliance during audit.

Installment Plans for Administrative Penalties Under UAE Corporate Tax

As per UAE corporate tax regulations, corporate tax payment in the UAE can be made as multiple payments but MUST be settled fully before due date.

The UAE FTA offers an installment option for administrative penalties. Businesses facing challenges such as late filing, late UAE corporate tax registration or inaccurate submission may qualify for installment penalty payment.

This provision installment plan aims to help businesses with financial challenges.

Keep in mind this installment option applicable to administrative penalties and does not extend to corporate tax payment.

What Are Administrative Penalties in UAE Corporate Tax?

Administrative penalties is a charge imposed by the UAE FTA if taxpayers violate corporate tax obligations These penalties arise from late registration, missing filing deadlines, inaccurate records. Remember, these fines are separate from UAE corporate tax amount and must be paid in full.

Conditions to Qualify for Paying Penalties in Installments

Under UAE FTA  guidelines, installment plan for administrative penalties are applied to business meeting certain criteria:

1. Minimum penalty threshold: the total unpaid penalty should be AED 50000 or more.
2. No outstanding corporate tax: The corporate tax amount for the related period must be fully paid.
3. No active appeals: There are no active disputes for penalties.

This approach supports compliance with UAE FTA regulations while providing business flexibility in settling penalties.

UAE FTA Application Process for Penalty Installments Option

• Eligible businesses may request for a Payment installment plan via Emaratax portal.
• The application must include business details, penalty value, and signed declaration to comply with the payment schedule.
• The reviews the application and issues their decision which is final.
• Violation of approved penalty payment schedule may lead to termination of installment plan.

Your Action Plan for Late Corporate Tax Payments in UAE

Are you facing challenges in paying UAE corporate tax on time? Promptly taking actions and addressing issues may minimize penalties and ensure compliance with UAE corporate tax regulations.

• Plan your finances wisely: Periodically review your company’s financial health and easily allocate funds to adhere to timely corporate tax payment in UAE.
• Compliance first: File your corporate tax in UAE within deadline to prevent from non- compliance penalties and comply with UAE FTA regulations.
• Get expert assistance: Engage with UAE corporate tax consultants such as Jaxa Chartered Accountants- UAE FTA certified tax agents help to review your finances, manage tax liabilities and ensure compliance with UAE FTA regulations.

Your Trusted Corporate Tax Consultant in the UAE – Jaxa Chartered Accountants

Navigating UAE corporate tax compliance is challenging, so partnering with a trusted accountant and taxation expert in Dubai may simplify compliance and accuracy. Jaxa chartered Accountants is a best accounting and auditing firm in UAE as well as certified FTA tax agent helps to manage corporate tax return filing in UAE ensuring UAE FTA regulation with confidence.

Jaxa Chartered Accountants delivers reliable, customized corporate tax services in UAE such as:

• UAE FTA Corporate Tax Registration
• Corporate Tax Accounting and Implementation
• Corporate Tax Compliance Review
• UAE Corporate Tax Return Filing Preparation
• Corporate Tax Impact Assessment
• Corporate Liability Evaluation

Jaxa auditors having 18 years of experience serves clients from initial corporate tax registration to corporate tax audit in UAE. Trust Jaxa for its all-in-one corporate tax services in UAE.

Your trusted partner for stress-free corporate tax management- Act now to stay compliant and penalty-free — reach out to Jaxa’s team today.