Guide to corporate tax filing in UAE

Corporate Tax Returns in the UAE is a compulsory requirement for companies working in the UAE. Failure to comply with this obligation may direct you towards hefty penalties and fines. The corporate law levies a 9% headline tax rate effective from June 1, 2023, while companies with annual taxable profits less than the threshold of AED 375,000 are exempt from corporate taxation in the UAE. Since UAE corporate tax rules might be new or complicated for some businesses, it is essential to prepare for UAE corporate tax filing to professionally and precisely file your income tax return.

What is the procedure of corporate tax filing in the UAE?

The step-by-step procedure of corporate tax filing in the UAE are;

• Tax registration

The first step is to get a tax registration number such as TRN from the Federal Tax Authority. TRN is an exclusive identification number that is allocated to every business in the UAE. Companies can apply for a tax registration number through the FTA online portal.

• Record keeping

The next step is to keep proper records of all financial records or transactions and tax-linked documents in line with the UAE tax laws.

• Preparation of tax return

After that, calculate your taxable income and formulate a tax return based on the records kept. The FTA offers a tax return form, which companies can download from online portal and use to file their returns.

• Filing of tax return

After preparation, submit the tax return form to the FTA through their online platform. It must be submitted before the due date.

• Payment of tax

Pay the tax liability as per the tax return filed on or before the due date after submitting your tax return form.

What are the required documents for corporate tax filing in UAE?

The required documents for corporate tax filing in UAE are;

• Income Statement
• Balance Sheet
• Cash Flow Statement
• Transfer Pricing records
• Sales invoices
• Revenue records
• Records and plans for devaluation of tax
• Contracts and agreements
• Bank Statements
• Movement of Provisions
• Tax Registration Certificate
• Records of Assets and Liabilities
• Audit Reports

Who needs to file corporate tax in the UAE?

• All companies working in the UAE, with free zone companies are required to file corporate tax.
• Branches of foreign companies working within the UAE are required to file corporate tax.
• Companies involved in industrial, and service industries are required to file corporate tax.
• Limited liability companies (LLCs) and public joint-stock companies (PJSCs) both are required to file corporate tax.
• Private joint-stock companies are also required to file corporate tax.
• Sole establishments and individual establishments involving in commercial activities are required to file corporate tax.
• Businesses with income produced from UAE-based sources are obligated to file corporate tax.
• Organizations that have surpasses the threshold for taxable income are required to file corporate tax.

What are the deadlines for corporate tax filing in UAE?

The deadline for submitting a corporate tax return in the UAE is 9 months according to the end of the tax period. For instance;

• If your company’s first tax period starting on June 1, 2023, you will have to file within a deadline of February 28, 2025.
• If your company’s first tax period starting on January 1, 2024, you must file your corporate tax return within a deadline of September 30, 2025.

To file corporate tax returns on time offers numerous benefits. It includes well-organized cost management, appropriate time control, a consolidated tax return, and the ability to offset taxable profits with tax losses within the group.

Conclusion

For several businesses, tax filing is a difficult task with numbers and calculations. If you conduct a survey among businesses, many talk about tax filing like a complicated process to be approached with supreme care and deep focus. In the advanced corporate landscape of UAE, it is recommended to get assistance from the top consultants such as corporate Tax UAE Their well-capable team can handle all the complications and navigate your company by addressing all the complex numbers and calculations themselves effectively. By outsourcing your corporate related tasks, you can focus on other core points of your business that needs attention.