Filing corporate tax returns is obligatory for businesses operating in the UAE, with non-compliance leading to penalties and fines. The UAE's corporate tax legislation is formally announced, prompting companies to prepare for timely submission as required by the Federal Tax Authority (FTA).
The introduction of Corporate Tax occurred in January 2022 under the auspices of the Ministry of Finance, UAE, with implementation slated for either June 2023 or January 2024. Effective June 1, 2023, the Corporate Tax Law imposes a headline rate of 9%. Profits below AED 375,000 annually incur a 0% tax rate. The framework integrates internationally recognized best practices in taxation.
Every eligible entity must register for Corporate Tax and secure a Tax Registration Number. Additionally, in certain instances, the tax authority may mandate Exempt Persons to register for Corporate Tax.
What is Corporate Tax Return Filing in UAE?
Filing corporate tax returns in the United Arab Emirates (UAE) entails submitting a comprehensive report to the pertinent tax authority, outlining a company's income and expenditures. This process, conducted by the Taxable Person, encompasses providing details on corporate tax liability and payment for a designated tax period. According to Corporate Tax Law, the Tax Return must be submitted within a specified timeframe to the tax authority.
If the Authority requests any supplementary information, documentation, or records, it is incumbent upon the taxpayer to furnish these to the tax authority promptly.
Is it Mandatory To File Corporate Tax Returns in UAE?
Corporate tax return filing is mandatory in the United Arab Emirates (UAE) as per the regulations set by the Federal Tax Authority (FTA). All companies operating in the UAE are obligated to submit tax returns and fulfill their tax liabilities according to UAE tax laws. However, businesses with an income below AED 375,000 are subject to a 0% tax rate.
These tax laws apply to both local and foreign companies, and failure to comply with tax return filings or tax payments can lead to penalties and fines.
Regarding UAE businesses with no income, they are still required to file Corporate Tax returns. This requirement extends to all taxpayers, regardless of the company's income level or status.
How to File Corporate Tax Returns in UAE?
You can file Corporate Tax Returns online through the EmaraTax portal. Currently, the FTA approves the pre-registration of corporate tax for selected entities. If you are one, you can register for corporate tax in EmaraTax. Have not created an account on EmaraTax? Here’s a guide to log in and register into EmaraTax. EmaraTax merged with the UAE Central Bank and UAE PASS to reorganize the user experience.
Procedure of Corporate Tax Return Filing in UAE
The procedure of filing corporate tax returns in UAE includes,
- Tax registration: Obtain a tax registration number from the Federal Tax Authority (FTA) by submitting the required documents and information.
- Record keeping: Maintain proper records of all financial transactions and tax-related documents in accordance with the UAE tax laws.
- Preparation of tax return: Calculate taxable income and prepare a tax return based on the records maintained, taking into account tax deductions and exemptions as per the UAE tax laws.
- Filing of tax return: Submit the tax return to the FTA through their online platform, e-Services, on or before the due date.
- Payment of tax: Pay the tax liability as per the tax return filed on or before the due date.
- Tax audit: In case of a tax audit, the FTA may request additional information or documents to verify the accuracy of the tax return filed.
We can help you in calculating and devising your tax liability for Corporate tax and assist you throughout the UAE Corporate tax return filing process.
