Article 52 Case Scenarios

1. Alex is a taxable person who is willing to deregister from Corporate Tax. A penalty of AED 1000 is levied on him and is unpaid. Whether he can apply for Deregistration?

Solution: As per the provisions of “Article 52 (Clause 2) – A Taxable Person shall not be deregistered unless it has paid all Corporate Tax and Administrative Penalties due and filed all Tax Returns due under this Decree-Law, including its Tax Return for the Tax Period up to and including the date of cessation.

As Alex has not yet paid the Administrative penalties, he can’t be deregistered.

2. XYZ Ltd., A taxable person was engaged in Construction Business but it’s business ceases to exist on 25^th January 2022 and it has applied for deregistration but couldn’t comply with its requirements. It had some pending penalty dues which it cleared on 3^rd March,2022. What will be its effective date of deregistration?

Solution: As per the provisions of “Article 52 – Where a Person does not comply with the Tax Deregistration requirements under this Article, the Authority may, at its discretion and based on information available to the Authority, deregister the Taxable Person effective from the later of either:

1. the last day of the Tax Period in which it became apparent to the Authority that the conditions under Clause 2 of this Article have been met; or
2. the date the Taxable Person ceases to exist

Therefore, the effective date of registration of XYZ Ltd. Is 3^rd March,2022.