Tag: corporate tax

Essential Guide to Corporate Tax Documentation in the UAE for 2024
As corporate tax regulations evolve, businesses in the UAE must adapt to stay compliant and efficient in their financial management. One of the most critical aspects of corporate tax management is ensuring that your documentation is accurate and well-organized. This blog will explore why proper documentation is crucial for corporate tax in the UAE, particularly in 2024, with evolving tax laws and greater scrutiny from authorities. Let’s understand why documentation is important for corporate tax in UAE:

Must Read: Calculating Corporate Tax for a Free Zone Person – Rohitashva Singhvi

Why Proper Documentation is Crucial for Corporate Tax in the UAE – 2024 Guide

The Importance of Proper Corporate Tax Documentation

When dealing with corporate tax in the UAE, having a robust system for maintaining and managing your documentation can offer multiple advantages. Let’s explore the main reasons why proper documentation is essential for your business:

1. Compliance with Tax Laws

Staying compliant with UAE’s corporate tax laws is not optional—it’s a necessity. As businesses navigate the regulations, the importance of thorough documentation becomes even more apparent.

Avoiding Penalties: In 2024, the UAE’s corporate tax regime has grown stricter in enforcing regulations. One of the primary reasons for maintaining accurate documentation is to avoid penalties and fines. Incomplete or erroneous documentation can lead to tax miscalculations, ultimately resulting in heavy penalties. By ensuring that your business’s financial records are detailed and precise, you are protecting it from potential legal action or financial losses.

Supporting Claims: Accurate documentation also supports any tax deductions, credits, or exemptions you may claim. For instance, if your business claims tax deductions on expenses, proper receipts and invoices can serve as evidence to back up those claims. This level of thoroughness ensures that you comply with local tax regulations and that you maximize the financial benefits available under the UAE’s tax regime.

2. Accurate Tax Calculations

Another vital role of proper documentation is to facilitate accurate tax calculations. With precise record-keeping, businesses can prevent tax errors, which can have costly consequences.

Preventing Errors: Errors in tax calculations can either lead to overpayment or underpayment, both of which are undesirable outcomes. Overpayment may negatively affect your cash flow, while underpayment can trigger penalties. By maintaining comprehensive documentation, such as invoices, payroll records, and bank statements, you can avoid these pitfalls and ensure accurate tax filings in the UAE.

Supporting Audits: Tax audits are an inevitable reality for many businesses, especially with the UAE’s increasing focus on corporate tax compliance in 2024. If your business is selected for an audit, having accurate and well-organized documentation can save you from unnecessary stress. It enables you to provide clear evidence and explanations to support your tax filings, reducing the risk of penalties or further investigations.

3. Financial Transparency

In addition to ensuring compliance and accuracy, proper documentation also plays a significant role in maintaining financial transparency—a crucial factor for building trust with stakeholders.

Stakeholder Confidence: Investors, lenders, and other stakeholders in your business rely on transparent financial records to gauge your company’s financial health. If your documentation is incomplete or disorganized, it can erode their confidence. On the other hand, well-maintained financial records demonstrate that your business is transparent, organized, and well-managed. This trust is particularly important if you are seeking external financing or looking to attract new investors in 2024.

Decision-Making: Accurate financial records provide invaluable insights into your business’s financial position. These records are essential for making informed decisions on budgeting, cost-cutting, and investments. With the UAE’s corporate tax laws potentially impacting cash flow, having a clear understanding of your company’s finances can help you make strategic decisions that optimize your tax liabilities and enhance profitability.

4. Maintaining Historical Records

Having proper historical records is crucial for both ongoing financial analysis and in the event of legal disputes.

Business Analysis: Analyzing your company’s historical financial performance is key to identifying trends, making forecasts, and planning for future growth. With proper documentation in place, you can easily access past records to perform financial analyses that will help in decision-making. For instance, reviewing historical tax filings and financial statements can highlight areas where your business may be able to improve its efficiency or reduce tax liabilities.

Legal Disputes: In the unfortunate event of a legal dispute, your documentation can serve as a powerful form of evidence. Whether it involves disputes with clients, employees, or tax authorities, accurate and organized records can strengthen your position. It ensures you can back up your claims with facts and figures, reducing the likelihood of unfavorable legal outcomes.

Key Documents to Maintain for Corporate Tax Compliance in the UAE

Now that we’ve explored the importance of proper documentation, it’s essential to know which documents you should prioritize. Here’s a breakdown of key documents that UAE businesses should maintain for corporate tax purposes in 2024:

1. Financial Statements

Financial statements such as income statements, balance sheets, and cash flow statements are the backbone of your corporate tax filings. These documents provide a clear snapshot of your business’s financial health, making them essential for accurate tax calculations and supporting claims.

2. Invoices and Receipts

Keeping all invoices and receipts related to sales, purchases, and business expenses is critical. These documents substantiate any deductions or credits claimed and serve as a reference in case of discrepancies.

3. Payroll Records

Payroll records are essential for tracking employee wages, deductions, and tax withholdings. These records not only help in complying with tax regulations but also ensure that employee compensation is accurately reflected in your tax filings.

4. Bank Statements

Bank statements provide an additional layer of financial transparency, ensuring that all business transactions are accurately reflected in your tax documentation. Keeping detailed bank records will help reconcile discrepancies between your financial statements and actual cash flow.

5. Contracts and Agreements

Maintaining contracts and agreements with suppliers, customers, and employees is essential for documenting the nature of business transactions. These records can be useful for verifying the legitimacy of certain expenses or deductions, especially during audits.

6. Expense Reports

Employee-incurred expenses can add up, and proper documentation is necessary to claim these expenses as tax deductions. Ensure that detailed expense reports are maintained, along with supporting documentation such as receipts and invoices.

7. Tax Returns

Finally, it’s essential to keep a record of all past tax returns and their supporting documentation. This can serve as a point of reference when preparing future tax filings and can be crucial in the event of an audit or tax dispute.

How Proper Documentation Minimizes Tax Risks

Maintaining proper documentation is one of the best ways to minimize tax-related risks. Here are some ways how good documentation can protect your business:
- Reduced Risk of Penalties: Ensuring that all records are accurate and up-to-date means fewer chances of discrepancies or miscalculations in your tax filings, reducing the likelihood of penalties.
- Improved Audit Preparedness: In the event of a tax audit, proper documentation allows you to respond quickly and effectively, providing clear evidence to support your claims.
- Increased Financial Control: Comprehensive documentation gives you more control over your finances, allowing you to identify areas where you can cut costs, optimize deductions, and better manage your tax liabilities.
- Legal Protection: In the case of legal disputes, proper documentation serves as evidence, helping you resolve disputes in your favor and protecting your business from financial liabilities.
The Role of Digital Solutions in Documentation

As the UAE’s corporate tax landscape evolves in 2024, many businesses are turning to digital solutions to streamline their documentation processes. Cloud-based accounting software and tax management platforms allow businesses to maintain accurate and organized records while reducing the administrative burden.

These digital tools can automatically generate financial statements, track expenses, and store important documents in one place, making it easier to access and manage your records. With real-time reporting and audit trails, these tools also enhance transparency and compliance.

Conclusion: The Future of Corporate Tax Documentation in the UAE

As the UAE’s corporate tax laws continue to evolve, maintaining proper documentation is more important than ever. Businesses that prioritize accuracy, organization, and transparency in their financial records will not only ensure compliance with tax laws but also gain valuable insights into their financial health, improve decision-making, and build trust with stakeholders.

By focusing on comprehensive documentation, UAE businesses can mitigate the risk of penalties, avoid costly errors, and make strategic decisions that foster long-term growth. Whether you’re a small business or a large corporation, the importance of proper documentation cannot be overstated. As we move forward in 2024, investing in a robust documentation system is key to thriving in the UAE’s increasingly regulated corporate tax environment.

Must Read: Top 50 Financial Accounting Terms – Rohitashva Singhvi

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October 7, 2024

Calculating Corporate Tax for a Free Zone Person

Corporate Tax Rate for a QFZP

If a Free Zone Person (FZP) meets all the conditions, including the de minimis requirements, to be a Qualifying Free Zone Person (QFZP), the applicable Corporate Tax rates are:

0% Corporate Tax rate on Qualifying Income
9% Corporate Tax rate on Taxable Income that is not Qualifying Income

Note: A QFZP is not entitled to a 0% Corporate Tax rate on its first AED 375,000 of Taxable Income.

Qualifying Income

Qualifying Income is defined based on the following categories:

Transactions with a Free Zone Person who is the Beneficial Recipient of the transaction (excluding Revenue from Excluded Activities)
Transactions related to Qualifying Activities (excluding Revenue from Excluded Activities)
Qualifying Income from Qualifying Intellectual Property
Other sources (including Revenue from Excluded Activities) if the QFZP meets the de minimis requirements

Revenue from the following sources does not qualify as Qualifying Income, even if it falls within the categories listed above:

Revenue attributable to a Foreign Permanent Establishment
Revenue attributable to a Domestic Permanent Establishment
Revenue from Immovable Property (other than Commercial Property located in a Free Zone when the income arises from a transaction with a Free Zone Person)
Revenue from the ownership or exploitation of intellectual property (other than Qualifying Income from Qualifying Intellectual Property)

Taxable Income That Is Not Qualifying Income

To determine the Taxable Income that is not Qualifying Income, which will be subject to the 9% Corporate Tax rate, a QFZP must:

Separate the Revenue in its Financial Statements into Revenue pertaining to the Qualifying Income component and the Taxable Income component.
Allocate the expenses in its Financial Statements against these components in a reasonable manner, consistent with the arm’s length principle.
Apply Article 20 of the Corporate Tax Law (general rules for determining Taxable Income) to determine the Taxable Income that is not Qualifying Income.

Corporate Tax on QFZP with a Domestic Permanent Establishment

Example: Company J

Revenue for the Tax Period Ending 31 December 2024:

AED 1,000,000 attributable to Qualifying Activities that are not Excluded Activities performed in a Free Zone.
AED 2,000,000 attributable to activities conducted through a Domestic Permanent Establishment.

Operating Expenses for the Tax Period:

AED 600,000 incurred by the Free Zone parent.
AED 1,400,000 incurred by its Domestic Permanent Establishment.
AED 300,000 incurred in the Domestic Permanent Establishment for HR administrative activities that support both the Free Zone parent and Domestic Permanent Establishment. Applying an appropriate allocation key (e.g., relative headcount), Company J determines that 50% of these expenses should be attributed to its Free Zone parent.

Allocation of Revenue and Expenses: Based on the arm’s length principle, Company J determines that the Revenue and expenses in its Financial Statements for the Tax Period ending 31 December 2024 can be allocated between Qualifying Income and Taxable Income as follows (amounts in AED):

Items	Total	Domestic Permanent Establishment (Taxable Income)	Free Zone Parent (Qualifying Income)
Revenue	3,000,000	2,000,000	1,000,000
Less: Direct expenses	2,000,000	1,400,000	600,000
Less: Allocated expenses	300,000	150,000	150,000
Profit	700,000	450,000	250,000

Calculation Table

Corporate Tax Calculation:

Company J will be subject to a 0% Corporate Tax rate on its Qualifying Income of AED 250,000.
Company J will be subject to a 9% Corporate Tax rate on the AED 450,000 profit attributable to its Domestic Permanent Establishment, resulting in a Corporate Tax of AED 40,500.

This calculation assumes there are no further adjustments as per Article 20 of the Corporate Tax Law.

References:

Article 3(2) of the Corporate Tax Law
Article 3(1) of Cabinet Decision No. 100 of 2023
Corporate Tax Guide | Free Zone Persons | CTGFZP1

June 1, 2024

Navigating Corporate Real Estate Investment Taxes in the UAE

Maximizing Returns:
Are you a savvy property investor eyeing the lucrative landscape of the UAE? Understanding the intricate dance between corporate investment in real estate and tax implications is paramount for maximizing your returns. Let’s delve into the dynamic world of corporate real estate investment taxes and uncover strategies to optimize your investment portfolio.

1. Active vs. Passive: Deciphering Tax Impacts

The first step in unraveling the tax labyrinth is discerning whether your corporation is actively engaged in real estate business operations or passively holding investments. Here’s the lowdown:

a. Real Estate Business: If your corporation is in the business of developing, managing, renting, or brokering commercial properties, brace yourself for the UAE’s corporate tax rate of 9% on profits exceeding AED 375,000. Whether you own the properties outright or manage them for others, this tax applies.

b. Investment Property: Alternatively, if your corporation simply holds real estate for passive income through rentals sans a business license, rejoice! Rental income typically eludes the clutches of corporate taxation.

2. Unveiling Potential Tax Ramifications

But wait, there’s more! Even within the realm of passive investment properties, hidden tax implications may lurk:

a. Increased Expenses, Lower Profits: Every coin has two sides. While corporate investment in real estate can bolster your portfolio, it may also entail expenses for property maintenance and renovations. Fear not, for these expenses can chip away at your taxable income, potentially reducing your corporate tax burden.

b. Capital Gains Conundrum: Picture this: You sell your investment property at a handsome profit. While the UAE currently doesn’t impose capital gains tax, future legislation might alter the landscape. Stay vigilant and anticipate potential tax shifts.

3. Strategic Tax Maneuvers

In the game of tax optimization, strategic maneuvers can tip the scales in your favor:

a. REITs: Real Estate Investment Trusts (REITs) present a beacon of tax efficiency in the UAE. Meet the specified requirements, and your corporation may revel in tax exemptions, paving the way for reduced tax liabilities.

4. The Bottom Line

Corporate investment in real estate is not merely a financial endeavor—it’s a strategic dance with taxation. While passive investment properties offer a semblance of tax neutrality, active real estate businesses face the inevitability of corporate taxation.

In this labyrinth of tax regulations, wisdom lies in seeking counsel. Consult with a seasoned tax advisor to unravel the nuances of your real estate investment strategy in the UAE. Maximize your returns, minimize your tax burden, and embark on a journey of financial prosperity in the vibrant landscape of UAE real estate.

May 14, 2024

UAE Corporate Tax – All in one basic info

What is Corporate Tax?

Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses.

Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.

Who is subject to Corporate Tax?

Broadly, Corporate Tax applies to the following “Taxable Persons”:

UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course; and
Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE (which is explained under [Section 8]).

Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone Person can benefit from a Corporate Tax rate of 0% on their Qualifying Income (the conditions are included in [Section 14]).

Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent Establishment may be subject to Withholding Tax (at the rate of 0%). Withholding tax is a form of Corporate Tax collected at source by the payer on behalf of the recipient of the income. Withholding taxes exist in many tax systems and typically apply to the cross-border payment of dividends, interest, royalties and other types of income.

Who is exempt from Corporate Tax?

Certain types of businesses or organisations are exempt from Corporate Tax given their importance and contribution to the social fabric and economy of the UAE. These are known as Exempt Persons and include:

Automatically exempt	● Government Entities● Government Controlled Entities that are specified in a Cabinet Decision
Exempt if notified to the Ministry of Finance (and subject to meeting certain conditions)	● Extractive Businesses● Non-Extractive Natural Resource Businesses
Exempt if listed in a Cabinet Decision	● Qualifying Public Benefit Entities
Exempt if applied to and approved by the Federal Tax Authority (and subject to meeting certain conditions)	● Public or private pension and social security funds● Qualifying Investment Funds● Wholly-owned and controlled UAE subsidiaries of a Government Entity, a Government Controlled Entity, a Qualifying Investment Fund, or a public or private pension or social security fund

In addition to not being subject to Corporate Tax, Government Entities, Government Controlled Entities that are specified in a Cabinet Decision, Extractive Businesses and Non-Extractive Natural Resource Businesses may also be exempted from any registration, filing and other compliance obligations imposed by the Corporate Tax Law, unless they engage in an activity which is within the charge of Corporate Tax.

How is a Taxable Person subject to Corporate Tax?

In line with the tax regimes of most countries, the Corporate Tax Law taxes income on both a residence and source basis. The applicable basis of taxation depends on the classification of the Taxable Person.

A “Resident Person” is taxed on income derived from both domestic and foreign sources (i.e. a residence basis).
A “Non-Resident Person” will be taxed only on income derived from sources within the UAE (i.e. a source basis).

Residence for Corporate Tax purposes is not determined by where a person resides or is domiciled but instead by specific factors that are set out in the Corporate Tax Law. If a Person does not satisfy the conditions for being either a Resident or a Non-Resident person then they will not be a Taxable Person and will not therefore be subject to Corporate Tax.

Who is a Resident Person?

Companies and other juridical persons that are incorporated or otherwise formed or recognised under the laws of the UAE will automatically be considered a Resident Person for Corporate Tax purposes. This covers juridical persons incorporated in the UAE under either mainland legislation or applicable Free Zone regulations, and would also include juridical persons created by a specific statute (e.g. by a special decree).

Foreign companies and other juridical persons may also be treated as Resident Persons for Corporate Tax purposes where they are effectively managed and controlled in the UAE. This shall be determined with regard to the specific circumstances of the entity and its activities, with a determining factor being where key management and commercial decisions are in substance made.

Natural persons will be subject to Corporate Tax as a “Resident Person” on income from both domestic and foreign sources, but only insofar as such income is derived from a Business or Business Activity conducted by the natural person in the UAE. Any other income earned by a natural person would not be within the scope of Corporate Tax.

Who is a Non-Resident Person?

Non-Resident Persons are juridical persons who are not Resident Persons and:

have a Permanent Establishment in the UAE; or
derive State Sourced Income.

Non-Resident Persons will be subject to Corporate Tax on Taxable Income that is attributable to their Permanent Establishment (which is explained under Section 8).

Certain UAE sourced income of a Non-Resident Person that is not attributable to a Permanent Establishment in the UAE will be subject to Withholding Tax at the rate of 0%.

What is a Permanent Establishment?

The concept of Permanent Establishment is an important principle of international tax law used in corporate tax regimes across the world. The main purpose of the Permanent Establishment concept in the UAE Corporate Tax Law is to determine if and when a foreign person has established sufficient presence in the UAE to warrant the business profits of that foreign person to be subject to Corporate Tax.

The definition of Permanent Establishment in the Corporate Tax Law has been designed on the basis of the definition provided in Article 5 of the OECD Model Tax Convention on Income and Capital and the position adopted by the UAE under the Multilateral Instrument to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. This allows foreign persons to use the relevant Commentary of Article 5 of the OECD Model Tax Convention when assessing whether they have a Permanent Establishment or not in the UAE. This assessment should consider the provisions of any bilateral tax agreement between the country of residence of the Non-Resident Person and the UAE.

What is Corporate Tax imposed on?

Corporate Tax is imposed on Taxable Income earned by a Taxable Person in a Tax Period.

Corporate Tax would generally be imposed annually, with the Corporate Tax liability calculated by the Taxable Person on a self-assessment basis. This means that the calculation and payment of Corporate Tax is done through the filing of a Corporate Tax Return with the Federal Tax Authority by the Taxable Person.

The starting point for calculating Taxable Income is the Taxable Person’s accounting income (i.e. net profit or loss before tax) as per their financial statements. The Taxable Person will then need to make certain adjustments to determine their Taxable Income for the relevant Tax Period. For example, adjustments to accounting income may need to be made for income that is exempt from Corporate Tax and for expenditure that is wholly or partially non-deductible for Corporate Tax purposes.

What income is exempt?

The Corporate Tax Law also exempts certain types of income from Corporate Tax. This means that a Taxable Persons will not be subject to Corporate Tax on such income and cannot claim a deduction for any related expenditure. Taxable Persons who earn exempt income will remain subject to Corporate Tax on their Taxable Income.

The main purpose of certain income being exempt from Corporate Tax is to prevent double taxation on certain types of income. Specifically, dividends and capital gains earned from domestic and foreign shareholdings will generally be exempt from Corporate Tax. Furthermore, a Resident Person can elect, subject to certain conditions, to not take into account income from a foreign Permanent Establishment for UAE Corporate Tax purposes.

What expenses are deductible?

In principle, all legitimate business expenses incurred wholly and exclusively for the purposes of deriving Taxable Income will be deductible, although the timing of the deduction may vary for different types of expenses and the accounting method applied. For capital assets, expenditure would generally be recognised by way of depreciation or amortisation deductions over the economic life of the asset or benefit.

Expenditure that has a dual purpose, such as expenses incurred for both personal and business purposes, will need to be apportioned with the relevant portion of the expenditure treated as deductible if incurred wholly and exclusively for the purpose of the taxable person’s business.

Certain expenses which are deductible under general accounting rules may not be fully deductible for Corporate Tax purposes. These will need to be added back to the Accounting Income for the purposes of determining the Taxable Income. Examples of expenditure that is or may not be deductible (partially or in full) include:

Types of Expenditures	Limitation to deductibility
BribesFines and penalties (other than amounts awarded as compensation for damages or breach of contract)Donations, grants or gifts made to an entity that is not a Qualifying Public Benefit EntityDividends and other profits distributionsCorporate Tax imposed under the Corporate Tax LawExpenditure not incurred wholly and exclusively for the purposes of the Taxable person’s BusinessExpenditure incurred in deriving income that is exempt from Corporate Tax	No deduction
Client entertainment expenditure	Partial deduction of 50% of the amount of the expenditure
Interest expenditure	Deduction of net interest expenditure exceeding a certain de minimis thresholdup to 30% of the amount of earnings before the deduction of interest, tax, depreciation and amortisation (except for certain activities)

What is the Corporate Tax rate?

Corporate Tax will be levied at a headline rate of 9% on Taxable Income exceeding AED 375,000. Taxable Income below this threshold will be subject to a 0% rate of Corporate Tax.

Corporate Tax will be charged on Taxable Income as follows:

Resident Taxable Persons
Taxable Income not exceeding AED 375,000(this amount is to be confirmed in a Cabinet Decision)	0%
Taxable Income exceeding AED 375,000	9%
Qualifying Free Zone Persons
Qualifying Income	0%
Taxable Income that does not meet the Qualifying Income definition	9%

What is the Withholding Tax rate?

A 0% withholding tax may apply to certain types of UAE sourced income paid to non-residents. Because of the 0% rate, in practice, no withholding tax would be due and there will be no withholding tax related registration and filing obligations for UAE businesses or foreign recipients of UAE sourced income.

Withholding tax does not apply to transactions between UAE resident persons.

When can a Free Zone Person be a Qualifying Free Zone Person?

A Free Zone Person that is a Qualifying Free Zone Person can benefit from a preferential Corporate Tax rate of 0% on their “Qualifying Income” only.

In order to be considered a Qualifying Free Zone Person, the Free Zone Person must:

maintain adequate substance in the UAE;
derive ‘Qualifying Income’;
not have made an election to be subject to Corporate Tax at the standard rates; and
comply with the transfer pricing requirements under the Corporate Tax Law.

The Minister may prescribe additional conditions that a Qualifying Free Zone Person must meet.

If a Qualifying Free Zone Person fails to meet any of the conditions, or makes an election to be subject to the regular Corporate Tax regime, they will be subject to the standard rates of Corporate Tax from the beginning of the Tax Period where they failed to meet the conditions.

What are Tax Groups, and when can they be formed?

Two or more Taxable Persons who meet certain conditions (see below) can apply to form a “Tax Group” and be treated as a single Taxable Person for Corporate Tax purposes.

To form a Tax Group, both the parent company and its subsidiaries must be resident juridical persons, have the same Financial Year and prepare their financial statements using the same accounting standards.

Additionally, to form a Tax Group, the parent company must:

own at least 95% of the share capital of the subsidiary;
hold at least 95% of the voting rights in the subsidiary; and
is entitled to at least 95% of the subsidiary’s profits and net assets.

The ownership, rights and entitlement can be held either directly or indirectly through subsidiaries, but a Tax Group cannot include an Exempt Person or Qualifying Free Zone Person.

How to calculate the Taxable Income of a Tax Group?

To determine the Taxable Income of a Tax Group, the parent company must prepare consolidated financial accounts covering each subsidiary that is a member of the Tax Group for the relevant Tax Period. Transactions between the parent company and each group member and transactions between the group members would be eliminated for the purposes of calculating the Taxable Income of the Tax Group.

Registering, filing and paying Corporate Tax

All Taxable Persons (including Free Zone Persons) will be required to register for Corporate Tax and obtain a Corporate Tax Registration Number. The Federal Tax Authority may also request certain Exempt Persons to register for Corporate Tax.

Taxable Persons are required to file a Corporate Tax return for each Tax Period within 9 months from the end of the relevant period. The same deadline would generally apply for the payment of any Corporate Tax due in respect of the Tax Period for which a return is filed.

Illustrated below are examples of the registration, filing and payment deadlines associated for Taxable Persons with a Tax Period (Financial Year) ending on 31 May or 31 December (respectively).

filing and payment deadlines associated for Taxable Persons with a Tax Period (Financial Year) ending on 31 May or 31 December (respectively).

How to prepare for Corporate Tax?

Read the Corporate Tax Law and the supporting information available on the websites of the Ministry of Finance and the Federal Tax Authority.
Use the available information to determine whether your business will be subject to Corporate Tax and if so, from what date.
Understand the requirements for your business under the Corporate Tax Law, including, for example:
1. Whether and by when your business needs to register for Corporate Tax;
2. What is the accounting / Tax Period for your business;
3. By when your business would need to file a Corporate Tax return;
4. What elections or applications your business may or should make for Corporate Tax purposes;
5. What financial information and records your business will need to keep for Corporate Tax purposes;
Regularly check the websites of the Ministry of Finance and the Federal Tax Authority for further information and guidance on the Corporate Tax regime.

Sources: FTA