Corporate Tax Filing

Corporate Tax is a direct tax levied on corporations' and businesses' net income or profit. In the UAE, adhering to Corporate Tax regulations involves two critical steps: Corporate tax registration and Corporate tax filing. Tax registration is the initial process where businesses register with the Federal Tax Authority to obtain a tax registration number, marking their entry into the UAE's tax system. Following this, tax filing is the periodic submission of detailed financial statements, calculating the tax owed based on the company's income and expenses.

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Corporate Tax

Corporate Tax, often called Corporate Income Tax or Business Profits Tax, is a form of direct tax levied on the net earnings of corporations and various business entities.

Corporate Tax Return Filing

Corporate Tax Registration is the process through which businesses in the UAE formally acknowledge their obligation to pay Corporate Tax. As per the Federal Tax Authority (FTA)'s regulations, every taxable entity, including Free Zone Persons, must register for Corporate Tax and obtain a Corporate Tax Registration Number.

Once a business has successfully obtained its Corporate Tax Registration number in the UAE, the next critical step is filing Corporate Tax returns.

Corporate Tax Return

In UAE, filing corporate tax returns is a legal requirement. The FTA mandates that all companies in the UAE, both local and international, must file tax returns and settle their tax dues on taxable income, as stipulated by UAE tax regulations.

Regardless of a company's income or operational status, all taxpayers in the UAE are obliged to file a corporate tax return. Non-compliance with these tax filing requirements can lead to penalties and fines.

Corporate Tax Return Filing

In the United Arab Emirates, corporate tax return filing refers to providing a detailed report of a company's income and expenses to the appropriate tax authority. This report, the Corporate Tax Return, is submitted by the company or the Taxable Person for a designated period to disclose information about their corporate tax obligations and payments.

According to the UAE Corporate Tax Law, this return must be filed within a specified timeframe. Furthermore, if the tax authority requires any extra documentation, information, or records, the company must supply these to the authority.

Eligibility for Corporate Tax Filing in the UAE

The entities required to file Corporate Tax returns include:

• Resident Companies: All resident companies in the UAE, regardless of their size or the sector in which they operate, must file Corporate Tax returns. This includes companies operating in both mainland UAE and free zones.
• Non-Resident Companies: Non-resident companies must file Corporate Tax returns if they conduct business or have a taxable presence in the UAE. This includes companies with a permanent establishment in the UAE or those earning UAE-sourced income not connected to a permanent establishment.
• Free Zone Companies: Although Free Zone companies may enjoy certain tax benefits or exemptions, they are still required to file Corporate Tax returns, especially if they engage in business activities outside the free zones or if their income does not qualify for the tax-exempt status.
• Individuals Engaged in Business Activities: Natural persons (individuals) whose business activities in the UAE generate income over a certain threshold are also required to file Corporate Tax returns. This typically applies to individuals operating as sole proprietors or in partnerships.

Exempt Entities with Notification Requirement

Certain entities, such as those involved in extractive industries or other specified sectors, might be exempt from Corporate Tax. However, they are generally still required to file returns or notify the tax authorities of their status.

Corporate Tax Return Filing for Freezone

Yes, entities located in Freezones are subject to corporate tax in the UAE and are required to file Corporate Tax returns. This applies regardless of whether they are categorized as Qualifying Free Zone persons.

Due Date for Corporate Tax Return Filing

Businesses in the UAE are required to file their corporate tax returns once for each tax period. Businesses have a nine-month window from the end of their tax period to file their corporate tax return and pay the due amount to the Federal Tax Authority (FTA).

For instance, if a company's tax period begins on June 1, 2024, the filing deadline would be February 28, 2026. Conversely, if the tax period starts on January 1, 2025, the deadline would be September 30, 2026.

Documents Required

Essential documents for corporate tax return filing include:

• Financial Records: Complete records of the company's financial transactions.
• Taxable Income Calculations: Documentation showing the adjustments made to the net accounting result for tax purposes.
• Depreciation Schedules: Records and plans detailing the depreciation of assets for tax purposes.
• Transfer Pricing Documentation: Records related to transactions involving transfer pricing.
• Related Party Transactions: Information on transactions that involve related parties or relatives.
• Provision Movements: Details on the movement of provisions that affect the company's taxable income.

Procedure for Corporate Tax Return Filing

Corporate tax returns in the UAE can be filed online through the EmaraTax portal. The FTA is currently allowing pre-registration of corporate tax for certain entities. To file Corporate Tax Returns in the UAE, the following steps should be followed:

• Corporate Tax Registration: Obtain a tax registration number from the Federal Tax Authority by providing the necessary documents and information.
• Record Management: Adhere to UAE tax laws by maintaining comprehensive records of all financial transactions and tax-related documents.
• Tax Return Preparation: Calculate your taxable income and compile a tax return using the maintained records, taking into account applicable tax deductions and exemptions in accordance with UAE tax laws.
• Tax Return Submission: Submit your tax return to the FTA via their online e-Services platform before the designated deadline.
• Tax Payment: Fulfill your tax obligations by settling the tax liability as indicated in the filed tax return before the specified due date.
• Tax Audit: If subjected to a tax audit, the FTA may request supplementary information or documents to verify the accuracy of the submitted tax return.

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Navigating the intricacies of Corporate Tax in the UAE can be a complex and time-consuming task for businesses. Recognizing this challenge, Filings.ae offers specialized and comprehensive assistance in corporate tax registration and filing in the UAE. Our team of experts is adept at handling every aspect of the tax filing process, from preparing detailed financial statements to ensuring accurate and timely submissions by UAE tax regulations.

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