What is Corporate Tax Return Filing in UAE?
Corporate Tax Return Filing in the UAE refers to the process where businesses operating within the United Arab Emirates are required to submit a document, known as a Corporate Tax Return, to the Federal Tax Authority (FTA). This document details the company's income, expenses, and the applicable corporate tax owed for a specific tax period. The introduction of Corporate Tax in the UAE, effective from June 2023, mandates that all taxable businesses comply with this filing requirement to ensure transparency and adherence to the nation’s tax regulations.
As per the Corporate Tax Law in UAE, Taxable Persons are required to file a Tax Return for each Tax Period, and this Tax Return must be filed no later than nine months from the end of the relevant Tax Period. For instance, the Tax Return for a Tax Period ending 31 December in Year One will need to be filed by 30 September in Year Two. The Corporate Tax statute allows the flexibility for the Authority to set a different filing due date. A Tax Return must be filed in the form issued, and in the manner prescribed, by the Authority.
Essential Information for Corporate Tax Filings
Taxable Person are required to furnish additional information to the Authority as part of their Tax Return. This includes, but is not limited to:
- The Tax Period to which the Tax Return relates.
- The name, address, and Tax Registration Number (a unique number issued by the Federal Tax Authority to each Taxable Person who is registered for Corporate Tax in UAE.
- The date of submission of the Tax Return.
- The accounting basis used in the financial statements
- The Taxable Income is the income that is subject to Corporate Tax for the relevant Tax Period.
- The amount of Tax Loss relief claimed if any.
- The amount of Tax Loss transferred in from other group companies (ies) or transferred out to other group companies (ies) if any, under the Corporate Tax Law.
- The amount of Withholding Tax Credit and Foreign Tax Credit.
- The amount of Corporate Tax Payable for the Tax Period.
Additionally, Taxable Persons have the legal obligation to provide the Authority with any information, documents, or records that may be required by the Authority to administer and enforce the Corporate Tax Law. Such information, documents, or records shall be provided as part of the Tax Return, or as and when requested by the Authority. Where the disclosure of information through the standard information reporting channel and format by a Taxable Person may impede national security or may be contrary to the public interest, the Corporate Tax Law allows the Authority to establish an alternative information disclosure mechanism for such Taxable Persons. The Authority may specify an alternative format or manner, or both, for the submission of a Tax Return or other information.
Special Provisions for Exempt Persons and Partnerships
Exempt Persons, who are exempt from Corporate Tax by way of application may be required to submit a declaration if requested by the Authority. The purpose of this requirement is to strike a balance between the Authority's need for information to verify the continued eligibility of these Exempt Persons for tax exemption and the compliance burden on these individuals. Instead of a full-scale Tax Return, a declaration suffices.
In the case of Unincorporated Partnerships that have not applied to be treated as a separate Taxable Person, the Authority can request the authorized partner of the Unincorporated Partnership to file a declaration on behalf of all the partners. The obligation to disclose falls on the authorized partner, rather than all the partners, to minimize the compliance burden associated with the disclosure requirement while still providing the necessary information about the Unincorporated Partnership to the Authority.
Tax Groups and Parent Company Responsibility
For Tax Groups, where members are considered a single Taxable Person, Corporate Tax Law clarifies that the responsibility for filing the Tax Return on behalf of the Tax Group lies with the Parent Company. This aligns with the representative role of the Parent Company.
Engage with UAE Tax Consultants
To effectively ensure compliance with corporate tax return filing, Taxable Persons should seek the services of Tax Consultants in UAE. Thus, contact us today and we shall be glad to assist you.
Mostafa is a seasoned Tax Consultant with over 5 years years of experience gained in diverse taxations matters. He has vast expertise in settling tax disputes with the Federal Tax Authority and handling of tax procedures in compliance with tax laws. He is adept in investigating underlying tax intricacies and offering expert tax advisory. He is also well-versed in conducting tax analysis’s and negotiations with the Tax Regulators, upon tax preparation and filing. Mostafa specializes in the areas of Tax law, Auditing, Accounting and Banking law.