[World Tax News] UAE Specified Timeframes for Corporate Tax Registration and More

Editorial Team – [2024] 160 taxmann.com 241 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. UAE specified timeframes for Corporate Tax Registration

The Federal Tax Authority (FTA) has specified timeframes for Taxable Persons subject to Corporate Tax to register with the FTA and avoid violating tax laws. Effective March 1, 2024, the new FTA Decision defines timeframes for registering for corporate tax, which applies to juridical and natural persons who are either resident or non-resident.

The Decision indicates that a juridical person who is a Resident Person incorporated, established, or otherwise recognised prior to March 1 2024, must apply to register for Corporate Tax within the following timeframes:

According to the Decision, if a juridical person does not have a license by the Decision’s effective date on March 1 2024, they must apply to register within three months, i.e. by May 31 2024. Meanwhile, if the juridical person holds multiple licenses, the deadline to apply for registration is based on the prior issued license to determine the maximum timeframe to submit the Corporate Tax registration application.

The Decision clarifies that a juridical person who is a Resident Person incorporated, established, or otherwise recognised under the applicable laws of another country or foreign jurisdiction and effectively managed and controlled in the UAE on or after March 1 2024, must apply to register for Corporate Tax within three months from the end of their Financial Year.

Source: Release

Federal Tax Authority Decision No. 3 of 2024

2. Thailand issues public consultation on Pillar 2 Global Minimum Tax

The Thailand Revenue Department seeks public consultation on proposed legislation for implementing Pillar 2 global minimum tax regulations. These regulations entail adopting the Pillar 2 Income Inclusion and Undertaxed Payment rules to ensure a minimum tax rate of 15% for multinational enterprise (MNE) groups having yearly consolidated revenue exceeding EUR 750 million in at least two of the past four accounting periods.

Additionally, the proposed legislation includes implementing a domestic minimum top-up tax for qualifying group members. Although the draft legislation does not specify an effective date, it aligns with the Thai Cabinet’s approval of the rules in March 2023, with a planned implementation slated for 2025.

The deadline for submitting comments is March 15, 2024.

Source: Public Consultation by the Revenue Department

3. European Parliament adopts its position on rules to simplify and fraud-proof withholding tax refunds

The simplifications to be brought about by the rules are expected to save investors around EUR 5 billion per year and, at the same time, provide tax authorities with more clarity to weed out fraudulent practices such as the cum-ex and cum-cum schemes, which cost European taxpayers around EUR 141 billion over 20 years.

The Commission proposed rules to regulate withholding tax procedures at the EU level to attack the problem of double taxation, which itself hampers cross-border investments and the Capital Markets Union, and also to prevent large-scale tax abuse schemes such as ‘Cum/Ex’ and ‘Cum/Cum’ schemes. ‘Cum/Ex’ schemes work as fraudulent multiple reclaim schemes when entitled to a single reclaim intended to address the risk of double taxation.

The rules will lay down procedures for the issuance of a digital tax residence certificate by Member States and a fast system to relieve any excess withholding tax that a Member State can withhold on dividends from publicly traded shares and, where applicable, interest from publicly traded bonds paid to registered owners who are resident for tax purposes outside that country. Furthermore, a standardised reporting obligation will provide national tax administrations with the necessary tools to check eligibility for the reduced rate and to detect potential abuse.

Source: Press Release by European Parliament