UAE Corporate Tax: A Guide to Filing, Documentation and Other Key Requirements

The UAE tax compliance landscape is about to undergo a paradigm shift with the government announcing the Corporate Tax(CT). The UAE corporate tax (likely to come into force on June 1st, 2023) has forced businesses to assess their eligibility and compliance requirements. Even though the law is yet to be announced, the Ministry of Finance has released a consultation document that details the key requirements businesses will be required to meet once the corporate tax regime takes effect.

Just like any other tax, the businesses will be required to perform a series of administrative tasks such as record keeping, registration, tax return filing, deregistration, payments etc.  The UAE Federal Tax Authority (FTA) is expected to administer and enforce corporate tax as per the rules and regulations to be issued by the Ministry. Tax agents in the UAE can come in handy for businesses to prepare for corporate tax compliance requirements. Here is a useful guide for businesses to navigate requirements such as corporate tax filing, documentation and other administrative requirements:

UAE Corporate Tax Registration

Businesses that fall within the scope of corporate tax in the UAE will be required to register with the FTA and obtain a Tax Registration Number within the time limit prescribed by the authority. The FTA has the power to register a qualifying entity in case it fails to conduct voluntary corporate tax registration in the UAE.

Record-Keeping Requirements

Businesses should ensure compliance with corporate tax in the UAE by maintaining financial and other records that explain the information detailed in the corporate tax return. They should also submit such documents to the Federal Tax Authority (FTA). Entities exempted from the UAE corporate tax will be required to maintain the records to enable the FTA to ascertain their exempted status.

Audited Financial Statements

The need for businesses to get their financial statements audited by accredited audit firms in the UAE will continue to be determined by relevant company laws and regulations. However, free zone businesses will be required to get their financial statements audited to benefit from the 0% corporate tax rate in the UAE. Consult with tax consultants in the UAE to get more information on this requirement.

UAE Corporate Tax Deregistration

There may arise a situation where a business stops being subject to the UAE corporate tax regime due to reasons including cessation or liquidation. In such a situation, the business should apply for corporate tax deregistration in the UAE. The application for corporate tax deregistration must be submitted to the FTA within three months from the date of cessation.

The FTA will approve the request for UAE corporate tax deregistration if it is satisfied that the entity has filed corporate tax returns and settled all its corporate tax liabilities and penalties (if any) due for all periods up to and including the date of cessation. If a business fails to apply for corporate tax deregistration within the deadline or fails to comply with the payment and filing obligations, the FTA will deregister it based on available information. Tax Consultants in the UAE can help businesses to apply for corporate tax deregistration.

UAE Corporate Tax Return Filing

Businesses will be required to prepare and file only one UAE corporate tax return and other related supporting schedules with the FTA for each tax period. Businesses are not required to file a provisional corporate tax return in the UAE and make advance payments of corporate tax. These relaxations will help the government to reduce the administrative burden on the taxpayers to a minimum.

Entities will be required to submit each tax return and related supporting schedules to the FTA within nine months of the end of the relevant Tax Period. Consult with tax agents in the UAE to get more information on this matter.

Corporate Tax Payments & Refunds

Taxpayers wanting to settle their corporate tax liability for a Tax Period must do it within nine months of the end of the relevant Tax Period. Taxpayers can apply for a tax refund with the FTA if they can demonstrate that a CT refund may be due. Talk with tax consultants in the UAE to clear the air on corporate tax payments and refunds.

Corporate Tax Assessments

The corporate tax regime in the UAE is based on a self-assessment principle. It means that the businesses should take responsibility for ensuring that the tax returns and supporting schedules submitted to the FTA are accurate, complete and comply with the UAE corporate tax law (the law is yet to be issued). The FTA will review the UAE corporate tax returns filed by the companies and issue an assessment within the timeframe prescribed in the Tax Procedures Law. Taxpayers are allowed to challenge the amended assessments issued by the FTA as per the procedures detailed in the Tax Procedures Law. Tax agents in the UAE can help businesses with tax assessment requirements.

Consult with FTA-Approved Tax Agents in the UAE

The introduction of corporate tax in the UAE is expected to have a far-reaching impact on the way businesses operate in the country. It is advisable for the companies to start their corporate tax readiness assessment with the help of FTA-approved tax agents in the UAE such as Jitendra Chartered Accountants (JCA). JCA’s highly qualified tax consultants in the UAE can help you to ensure early preparation, which is critical to avoid higher implementation costs as well as to reduce pressure on internal teams. Consult with JCA as soon as possible to prepare early and avoid last-minute surprises.

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