Corporate Tax Return Filing
Corporate tax returns filing is a legal obligation for companies operating in the UAE. Non-compliance with this requirement can lead to penalties and fines. With the recent announcement of UAE corporate tax legislation, companies are now preparing to submit their tax returns within the deadlines established by the Federal Tax Authority (FTA).
Corporate Tax was introduced by the Ministry of Finance, UAE, in January 2022, with implementation scheduled to commence on June 1, 2023, or by January 2024. The Corporate Tax Law stipulates a headline rate of 9%, with a 0% rate applicable to annual taxable profits up to AED 375,000. This regime incorporates internationally recognized best practices in taxation.
All taxable entities are required to register for Corporate Tax and obtain a Tax Registration Number. In certain instances, the tax authority may also require exempt entities 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 detailed report to the relevant tax authority that outlines a company’s income and expenses. This return, filed by the taxable entity, provides information on corporate tax liability and payment for a specific tax period. It is essential that the tax return be submitted within the designated timeframe established by the Corporate Tax Law.
If the tax authority requests additional information, documents, or records, the taxpayer must promptly provide the requested items to the authority.
Is Filing Corporate Tax Returns Mandatory in the UAE?
Yes, filing corporate tax returns is mandatory in the United Arab Emirates (UAE). The Federal Tax Authority (FTA) requires all companies operating within the UAE to submit tax returns and pay taxes on their taxable income in accordance with UAE tax laws. Businesses with income below AED 375,000 are subject to a 0% tax rate.
These tax laws apply to both domestic and foreign companies operating in the UAE. Non-compliance, including failure to file tax returns or pay taxes, may result in penalties and fines
Should Free Zone Entities File Corporate Tax Returns?
Corporate tax in the UAE applies to Free Zone entities as well. Therefore, all Free Zone entities are required to file a Corporate Tax return, regardless of whether they qualify as Qualifying Free Zone Persons.
What is the Deadline for Filing Corporate Tax Returns in the UAE?
Businesses in the UAE have up to 9 months from the end of the relevant tax period to submit their tax returns and pay Corporate Tax to the Federal Tax Authority (FTA). For instance, a company with a tax period commencing on June 1, 2023, will have a deadline of February 28, 2025, to file and pay. Conversely, a company with a tax period starting on January 1, 2024, will have a deadline until September 30, 2025, to fulfill these obligations.
This initiative reflects the UAE’s commitment to the effective implementation of Corporate Tax policy. Benefits of filing corporate tax returns include streamlined cost management, effective time control, the ability to file a single tax return for a corporate group, and the option to consolidate the tax liabilities of the group. This allows for the offsetting of taxable profits in some companies against tax losses in others within the group.
Procedure Corporate Tax Returns Filing Procedure in the UAE
The procedure for filing corporate tax returns in the UAE includes the following steps:
- Tax Registration: Ensure that your business is registered for Corporate Tax with the Federal Tax Authority (FTA) and obtain a Tax Registration Number (TRN).
- Document Preparation: Collect all necessary financial documentation, including income statements, expense reports, and other relevant records.
- Tax Liability Calculation: Accurately determine the corporate tax liability based on your financial records and the applicable tax rates.
- Complete Tax Return: Accurately complete the corporate tax return form, detailing income, expenses, and tax liability.
- Submit Tax Return: File the completed tax return electronically via the FTA’s online portal within the specified deadline.
- Tax Payment: Pay any taxes due to the FTA as calculated in your return.
- Record Keeping: Retain a copy of the filed return and all supporting documents for future reference and potential audits.
- Tax Audit: In case of tax audit, the Federal Tax Authority (FTA) may request additional information or documentation to verify the accuracy of the submitted tax return.
Our experts can assist you in calculating and determining your corporate tax liability and provide comprehensive support throughout the UAE Corporate Tax return filing process.
Corporate Tax Return Filing Services in UAE
Al-Hisab Tax Consultancy has highly Expert and seasoned tax consultants in the UAE, specializing in providing top-tier Corporate Tax services. We ensure that clients remain compliant with the relevant laws and regulations set forth by the tax authority.
Our team offers comprehensive assistance with document preparation, tax liability calculation, and overall tax compliance for Corporate Tax activities, including registration, return filing, and refunds.
For expert guidance on filing Corporate Tax returns, please contact Hisab Accountants & Tax Consultancy.