Corporate Tax Registration & Updating Tax Records

As the financial year 2024 concludes, businesses that follow the calendar year must finalize their accounts and ensure compliance with the UAE Corporate Tax Law (CT Law). Companies must now consider additional tax disclosure requirements while preparing financial statements.

Mandatory Corporate Tax Registration

All UAE businesses, including offshore and dormant companies (unless liquidated or struck off), must register for corporate tax. Failure to register on time may result in an automatic penalty of AED 10,000.

Grace Period For Updating Tax Information

The Federal Tax Authority (FTA) has granted a grace period until March 31, 2025, for businesses to update their tax records on the EmaraTax portal without incurring penalties. Businesses should review and update details such as:

• Business name, address, and contact details
• Trade license activities
• Legal entity type and partnership agreements
• Nature of business operations
• Business location

Qualifying Free Zone Person Status

Entities operating in UAE Free Zones must ensure they meet all the conditions to retain Qualifying Free Zone Person (QFZP) status. Any failure to comply will result in losing this status for the next four tax periods. A reassessment is essential to ensure eligibility for 2024.

Finalizing Financial Statements For 2024

The corporate tax impact on financial statements includes current tax liability, deferred taxes, and tax provisioning. Businesses must conduct a thorough tax computation to ensure compliance with UAE CT Law.

Key Areas To Assess:

• Tax exemptions (Small Business Relief, Free Zone benefits)
• Taxable income assessment (threshold: AED 375,000)
• Deferred tax implications (temporary accounting-tax differences)

Corporate Tax Return Preparation

When filing the first corporate tax return, certain elections are irreversible, making careful planning essential.

Key Considerations For Filing Tax Returns

Tax Elections – Businesses opting for the realized basis of taxation must make this election in their first tax return, as it is irrevocable for future tax periods.

Foreign Permanent Establishment (PE) Exemption – Companies with a foreign PE taxed at 9% or more in another jurisdiction may claim an exemption from UAE taxation.

Transitional Provisions – Entities seeking tax benefits on qualifying immovable property, financial assets, liabilities, or intangible assets must disclose relevant asset details in their first tax return.

Tax Losses & Reliefs – Businesses incurring tax losses can carry forward losses or transfer them within a group as per UAE CT Law.

Timely Tax Return Filing – Businesses must file their tax returns within 9 months after their financial year-end. Example: A company following a June–May financial year must submit its tax return by February 28, 2025.

Corporate Tax Return Filing Timeline

Stay on top of your corporate tax return filing deadlines! Make sure to file within the following timeframes to avoid penalties.

Accounting Compliance With Yuga Accounting

With the evolving tax landscape in the UAE, businesses need expert guidance to stay compliant and optimize tax benefits. Yuga Accounting provides corporate tax registration, return filing, tax compliance audits, and advisory services to help businesses navigate UAE CT Law efficiently.

For expert assistance, contact Yuga Accounting & Tax Consultancy today!

FOR MORE INFORMATION, CONTACT US :

Phone : +971 52 1952 532 / +971 4 240 1110

Mail-Id : info@yugaaccounting.com

Website : www.yugaaccounting.com