Corporate tax return filing is a legal requirement for companies operating in the UAE, and failure to comply can result in penalties and fines. With the announcement of UAE corporate tax law, companies are now preparing to file their corporate tax returns within the timeframe set by the Federal Tax Authority (FTA).
Corporate Tax was initially introduced by the Ministry of Finance, UAE, in January 2022, with implementation slated for June 2023 or January 2024. The Corporate Tax Law, effective from June 1, 2023, features a headline rate of 9%. Annual taxable profits under AED 375,000 are taxed at a 0% rate. The regime incorporates international tax best practices.
Every taxable person is required to register for corporate tax and obtain a Tax Registration Number (TRN). In certain instances, the tax authority may also request exempt persons to register for corporate tax.
What is Corporate Tax Return Filing in UAE?
Corporate tax return filing in the United Arab Emirates (UAE) involves submitting a report to the appropriate tax authority outlining a company’s income and expenses. This filing is done by the taxable person for a designated tax period, detailing corporate tax liability and payments. The tax return must be submitted within a specified timeframe as per the Corporate Tax Law.
If the Authority requests any additional information, document, or record, the taxpayer must promptly submit it to the tax authority.
Free Zone entities file for Corporate Tax Returns?
Corporate tax in the UAE applies to Free Zone Persons as well. Therefore, all entities in Free Zones must file a corporate tax return, regardless of whether they qualify as Qualifying Free Zone Persons or not.
Is Filing Corporate Tax Returns Mandatory in the UAE?
Yes, filing Corporate Tax returns in the United Arab Emirates (UAE) is mandatory. The Federal Tax Authority (FTA) mandates that companies operating in the UAE must submit tax returns and pay taxes on their taxable income in accordance with UAE tax laws. However, businesses earning less than AED 375,000 are subject to a 0% tax rate.
The tax laws in the UAE apply to both domestic and international companies operating within the country, and failing to file tax returns or pay taxes can lead to penalties and fines.
Should UAE businesses with no income file for CT returns? All Taxpayers are required to file a Corporate Tax return, irrespective of the income level or the status of the company.
What is the Deadline For Corporate Tax Return Filing in UAE?
Businesses in the UAE are given up to 9 months from the end of their respective tax period to file their tax return and settle Corporate Tax payments with the Federal Tax Authority (FTA). For instance, a company commencing its first tax period on June 1, 2023, would have until February 28, 2025, to meet this deadline. Similarly, a company starting its first tax period on January 1, 2024, would have until September 30, 2025.
This move is based on the UAE’s dedication to ensuring the smooth implementation of Corporate Tax policy. Benefits of filing corporate tax returns include efficient cost and proper control of time, a single tax return for a group, and the ability to combine the amount of group tax paid, wherein certain companies make a taxable profit while others may have a tax loss.
Procedure of Corporate Tax Return Filing in UAE rewrite
- Tax audit: In case of a tax audit, the FTA may request additional information or documents to verify the accuracy of the tax return filed.
- Record keeping: Maintain proper records of all financial transactions and tax-related documents in accordance with the UAE tax laws.
- Preparation of tax return: Calculate taxable income and prepare a tax return based on the records maintained, taking into account tax deductions and exemptions as per the UAE tax laws.
- Tax registration: Obtain a tax registration number from the Federal Tax Authority (FTA) by submitting the required documents and information.
- Filing of tax return: Submit the tax return to the FTA through their online platform, e-Services, on or before the due date.
- Payment of tax: Pay the tax liability as per the tax return filed on or before the due date.
We can assist you in calculating and determining your tax liability for Corporate Tax, as well as guide you through the entire process of filing Corporate Tax returns in the UAE.
Elements of Corporate Tax Return Filing Services in UAE
When filing a Corporate Tax Return, it is essential to include information regarding the company’s profits and expenses. The final outcome determines the amount of tax payable to the government.
Here are the essential documents required for filing Corporate Tax Returns:
- Movement of Provisions
- Financial records
- Transfer Pricing records
- Taxable income calculations showing changes in the net result in accounting
- Information on transactions that involve relatives
- Records and Plans for devaluation of tax
The tax experts and professionals at YUGA Accounting ensure the accurate preparation of corporate tax returns, protecting them from the risk of audit, thus ensuring maximum tax claims
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