Corporate Tax

Can UAE Corporate Tax Be Paid in Installments? What to Do If You Can’t Pay — What Businesses Need to Know

Since corporate tax in UAE has been effective as per Federal Decree-Law No. 47 of 2022, it has become the liability of all registered businesses to calculate and settle their tax obligations on time. Nevertheless, in practice, there may be firms that are short of funds or are unable to settle the full amount within the stipulated period.

So, can you pay your UAE corporate tax in installments? And what if you simply can't pay on time?

Let's get to the bottom of it in simple terms.

Can You Pay Corporate Tax in Installments in the UAE?

At present, the Federal Tax Authority (FTA) requests companies to pay the full corporate tax amount when filing their return within nine (9) months from the end of their financial year.

That being said, if a company is genuinely not able to pay in full, it can request a payment plan or extension from the FTA. These are considered on a case-by-case basis and need substantiated financial documentation showing temporary hardship.

In brief — installment payments are not the norm, but the FTA will consider them in reasonable circumstances.

What If You Can't Pay Corporate Tax on Time?

If you don't pay on time, the FTA will charge penalties according to UAE law. The penalties can be:

A late payment penalty (14% per annum, applied on a daily basis).
Additional penalties for late submission of your tax return.
Suspension or withholding of your FTA tax account.

So even if you can't pay right away, make sure you still file your tax return on time to reduce penalties and show your willingness to comply.

Steps to Take If You Can't Pay Corporate Tax Right Now

The following is what you need to do right now if your company can't pay the full corporate tax:

File the return anyway.

Always file your tax return on time, even if you can't pay now.

Notify the FTA.

Contact the FTA through the EmaraTax portal and explain your situation to them. They may offer a temporary payment deferment or installment plan.

Prepare documentation.

Get updated financial statements, cash flow statements, and any documents showing temporary financial hardship prepared.

Consult a tax consultant.

You can get the help of a registered corporate tax consultant to prepare the request and also in communicating properly with the FTA.

How to Avoid Corporate Tax Payment Issues

The best way to stay stress-free is to plan ahead.

Here’s how to make corporate tax management smoother:

Keep your accounting records updated every month.
Estimate your tax liability quarterly.
Set aside funds for tax throughout the year.
Use the services of professional tax advisors to track your deadlines.

Being proactive helps avoid last-minute surprises and penalties.

How Corporate Tax UAE Can Help

We help businesses with every step of corporate tax in UAE, from registration to payment and filing.

Our specialists help with:

Tax return preparation and filing.
Determining eligibility for reliefs and deductions.
FTA coordination for payment plans or extensions.
Keeping you penalty-free and compliant.

If you are facing any challenge paying your corporate tax, our consultants can guide you through the correct process in an effective way and with complete compliance with the FTA.

FAQs

[wp-accordion title='How to waive off corporate tax in UAE?' load_css_js='true' first='true' active='true' ]

Corporate tax cannot be waived but small businesses with income up to AED 3 million can qualify for Small Business Relief, which can reduce or eliminate their tax liability.

[/wp-accordion]

[wp-accordion title='What is the penalty for not filing corporate tax return in UAE?' load_css_js='true']

Penalties involve daily interest and penalties as per Cabinet Decision No. 75 of 2023. Repeated failure to comply may also affect your trade license renewal.

[/wp-accordion]

[wp-accordion title='How to avoid corporate tax in the UAE?' load_css_js='true']

You cannot avoid it, but you can legally reduce your tax burden with smart tax planning and the help of seasoned corporate tax consultants.

[/wp-accordion]

[wp-accordion title=' Who will be exempt from UAE corporate tax?' load_css_js='true']

Government entities, extractive businesses, and qualifying free zone businesses may be exempted if they meet the FTA's criteria.

[/wp-accordion]

[wp-accordion title=' Is all business in the UAE required to register for Corporate Tax?' load_css_js='true']

Yes, all businesses earning taxable income above AED 375,000 must register and file returns for corporate tax in UAE.

[/wp-accordion]

[wp-accordion title=' Will I have to pay corporation tax?' load_css_js='true' last='true']

If your company earns taxable profits above the exemption limit, then yes, you are liable to pay corporate tax by law.

[/wp-accordion]

Need help with filing or paying your corporate tax?

Contact us your UAE corporate tax partner of choice, to manage your filing, resolve payment delays, and ensure complete compliance with FTA requirements.