Your Complete Guide to UAE Corporate Tax Return Filing
Corporate Tax was introduced in UAE with effect from June 1st 2023, the key objective behind it is the country's long-term economic vision and overall growth. Under Federal Decree-Law No. 47 of 2022, UAE's corporate tax regime applies for financial years beginning on or after 1 June 2023. There are a few key points that should be followed while filing a Corporate Tax return. One of the most important aspects is accuracy and timely filings, as an annual corporate tax return is generally mandatory for taxable persons even where tax liability is zero, helping them stay compliant and avoid penalties.
UAE corporate tax filing is completed electronically with the Federal Tax Authority (FTA) through EmaraTax as part of federal corporate tax compliance.
Step 1: Determine Corporate Tax Eligibility
There are many misconceptions in the market due to several criteria related to checking the eligibility for filing Corporate Tax. First, check if you are subject to corporate tax. Here is the way-
-
Corporate tax applies to Resident Juridical persons, foreign companies with a Permanent Establishment, nexus, or UAE-sourced income, and Qualifying Free Zone persons including offshore companies registered in the UAE.
-
Natural persons conducting business or business activity in the UAE may also be subject to corporate tax if they fulfil a few conditions.
These filing obligations can still apply to taxable persons even where they qualify for a 0% rate, report a loss, or have no tax payable, and corporate tax filing mandatory rules do not depend on profitability.
After confirmation that your business is exempt or not taxable due to qualifying conditions, you should make sure that it will be indicated in the registration details. It is advisable to get help from a professional tax consultant to confirm eligibility. free zone entities should also monitor annual filing obligations carefully, as late corporate tax filing can trigger penalties.
Step 2: How to register for Corporate Tax?
Corporate tax registration in the UAE is mandatory for every taxable person with the Federal Tax Authority, and registration is a core part of the corporate tax filing process. Registering includes the following steps-
-
Prepare required documents such as trade licence, company incorporation certificate, UAE financial account number (IBAN), company's shareholder's identification documents, etc., and retain the corporate tax registration certificate once issued.
-
Login to the EmaraTax portal with your login credentials.
-
Navigate to the corporate tax registration section, fill out the form and upload the required documents.
-
Obtain the Corporate Tax Registration Number (TRN).
Late registration can trigger administrative penalties, including a fixed penalty of AED 10,000.
Some first-time registrants may qualify for a waiver of the late-registration penalty if filing is completed within 7 months, subject to the applicable conditions.
It is crucial to maintain proper records and financial statements as per IFRS standards. If you need assistance, Flying Colour Tax can help you with corporate tax registration and compliance.
Step 3: Identify your Tax Period
Mostly, for many businesses, the relevant tax period by default follows the Gregorian calendar. However the financial year can be customized by the businesses by filing an application to the FTA, in that case, their tax period will be aligned to their financial year. Here is the way to clarify it-
-
For companies following the calendar year, their tax period will be January 1 to December 31.
-
For companies with a custom financial year, their tax period will be from the first day of the financial year to the last day.
Businesses must first check their tax period, and they need to file the corporate tax return within 9 months of the end of the tax period as per the corporate tax filing deadline. Here is an example- For a company whose tax period is ending on 31st December 2024, their deadline for corporate tax return filing would be 30th September 2025.
Step 4: Prepare Financial Statements
When it comes to corporate tax return filing, businesses must comply with UAE tax laws and UAE corporate tax regulations. Businesses must maintain proper financial records and books of accounts for at least 7 years after the tax period ends. They should keep in mind that the records must be as per the accepted accounting standard in the UAE which is IFRS. Key components include:
-
Income Statement (Profit and Loss Statement)
-
Balance Sheet
-
Cash Flow Statement
Businesses with revenue above AED 50 million must maintain audited financial statements. Businesses earning AED 3 million to AED 50 million should at minimum have income statements and balance sheets available for filing in the UAE.
It is advisable that your records must be organized and updated. You may get help from a corporate tax consultant to stay compliant with the regulations. You can choose Flying Colour Tax Consultant as your partner for accounting and financial reporting services.
Step 5: Calculate Taxable Income
As per UAE corporate tax law, the taxable income is the total income that is subject to tax, after accounting for adjustments, permissible deductions and exemptions.
Businesses in Free Zones must exclude qualifying income (taxed at 0%) and non-qualifying income (taxed at 9%). Take the help of a tax consultant to ensure the correct classification between these two types of income. If you wish to know more about 0% Corporate Tax for Free Zone companies
Step 6: Review Available Tax Reliefs
There are few reliefs for the businesses set by FTA, we need to check the eligibility.
-
Small Business Relief: Businesses can claim this relief if their annual turnover is less than AED 3 Million* and it is available until the tax period ending on or before 31st December 2026.
-
Group Taxation Relief: Available for companies forming a Tax Group.
-
Business Restructuring Relief: Applicable to qualifying mergers or restructuring activities.
It is essential to prepare relevant documentation while claiming the relief. Businesses can count on Flying Colour Tax consultants to maximise tax benefits.
Step 7: Prepare and Upload Required Documents
The following is the list of documents that need to be gathered-
-
Financial Statements.
-
Tax Loss Schedules (if applicable).
-
Schedules for Related Party Transactions (if applicable), along with transfer pricing documentation where required.
-
Tax Credit Documentation.
-
Relevant supporting documents for exempt income or tax reliefs.
transfer pricing rules require related-party and intra-group transactions to follow the arm's-length principle in line with OECD standards.
You must be sure that documents are accurate and updated while filing returns.
Step 8: Complete the Corporate Tax Return on EmaraTax
Once the details are ready, start the corporate tax filing process in EmaraTax. This is the corporate tax filing process for tax filing in UAE and filing in uae through EmaraTax, where businesses file a corporate tax return electronically.
-
Log in to your EmaraTax account
-
Access the Corporate Tax Return section
-
Provide details so businesses can file corporate tax returns by entering the annual corporate tax return details and supporting calculations into the portal
-
Attach supporting schedules and documentation
-
Double-check all the provided information and submit
Step 9: Pay the Corporate Tax Liability
After corporate tax registration and obtaining the Corporate Tax Registration Number (TRN), businesses that need to pay corporate tax should settle the liability after completing the return, especially where taxable income exceeds AED 375,000, through:
-
Bank transfer
-
EmaraTax payymnet portal
-
eDirham
Businesses with taxable income above AED 375,000 must both file a corporate tax return and settle the tax by the same deadline.
The deadline for the tax payment is the same as for Corporate Tax Return Filing, ie. Within 9 months of the end of the financial year. Flying Colour Tax helps in filing returns on time and minimizing penalties.
Step 10: Maintain Records for Audit
The very critical step for most businesses is to keep proper records as per UAE regulations, and ongoing corporate tax compliance requires records to be retained for at least 7 years under applicable corporate tax laws.
Records to be maintained include, but are not limited to;
-
Financial statements
-
Invoices and receipts
-
Bank statements
-
Tax returns
-
Contracts and Agreements
-
Payroll records
The corporate tax registration certificate should also be retained with other key tax records.
Maintaining accurate and organized records supports corporate tax filing, helps respond to Federal Tax Authority queries, and is especially important for businesses operating in the UAE, including mainland companies. Maintaining accurate and organized records ensures smoother audits if inspected by FTA and also minimizes risks. Our professionals at Flying Colour ensure that you stay compliant at every point.
Common Pitfalls to Avoid
-
Late Corporate tax registration: check eligibility and register as soon as possible, as failure to register on time may lead to administrative penalties.
-
Incorrect tax return filings: Review all figures and disclosures, and note that voluntary disclosures may reduce penalties when filing errors are identified and corrected.
-
Failure to maintain proper records: Make sure that you maintain either a physical copy of a digital copy of all records up to 7 years from the end of the relevant tax year.
-
Late filing or payment of tax: Once the financial year ends, within 9 months the tax return shall be filed and the tax liabilities, if any, paid; missing the filing deadline results in AED 500 monthly penalties for the first 12 months, rising to AED 1,000 per month after that, with additional charges potentially applying on unpaid tax.
-
Incorrect tax relief claims: Make sure all the expenses claimed in the Corporate Tax return comply with the Corporate Tax Law and are reviewed against evolving UAE corporate tax regulations before submission.
Conclusion
Overall, if you want to stay compliant with UAE regulations, you must be updated with new laws. By filing taxes timely, paying dues on time, maintaining records as per IFRS standards and for at least 7 years, businesses can avoid penalties while focusing on financial growth.
As an expert tax advisory firm, Flying Colour Tax Consultant specialises in managing the corporate tax requirements of businesses including tax optimisation, tax registration, tax filings, business structuring etc. We will be proud to be part of your business growth by making sure that the company is compliant to the law of the land.
To learn more about Navigating UAE Corporate Tax: A Step-by-Step Guide to Filing Tax Returns, book a free consultation with one of the Flyingcolour team advisors.
FAQ
1. Is UAE corporate tax return filing mandatory if my company has no tax to pay?
Yes. All taxable persons must submit an annual corporate tax return regardless of whether they have a tax liability, expect a tax loss or are exempt from tax (0% rate). A company is always required to file its corporate tax returns on time and in full – with any late filing incurring penalties.
2. What is the deadline to file a UAE corporate tax return?
A company has 9 months from the end of the tax period to file its corporate tax return. For example, if your tax period ends on 31 December 2024, the corporate tax return for that period is due no later than 30 September 2025. The company must also pay any tax due by the filing deadline.
3. How do I file a corporate tax return in the UAE?
In general, you must submit your corporate tax return to the Federal Tax Authority (FTA) online via the EmaraTax portal. So, you will need to log into the portal, select ‘Corporate Tax Return’, complete the appropriate return, enter the calculation, attach schedules, view and confirm the return, and finally submit it. A Corporate Tax Registration Number (TRN) must be allocated to you before you can file a return.
4. What is the UAE corporate tax rate?
It is 0% for taxable income of AED 375,000 or less and 9% for taxable income exceeding AED 375,000. For a free zone company, qualifying income is subject to 0% tax, and non-qualifying income is subject to 9% tax. A free zone company must apportion its qualifying and non-qualifying income for tax purposes.
5. What are the penalties for late corporate tax filing or registration in the UAE?
Late Filing Penalty: An administrative penalty of AED 500 per month for the first 12 months of delinquency and AED 1,000 per month for subsequent months. In addition to the monthly penalty, the company will be charged additional fees if the tax is not paid. Late Registration Penalty: AED 10,000 fine.
6. What documents do I need to file a UAE corporate tax return?
The financial statements, tax loss schedules (if applicable), related-party schedules, transfer pricing documentation (if applicable), tax credit documentation (if applicable), and any other documents relating to an exempt amount or relief for which the company is claiming. The financial statements should be prepared in accordance with international financial reporting standards (IFRS).
7. What businesses qualify for Small Business Relief in the UAE?
The relief is available to businesses that have an annual turnover of less than AED 3 million for the tax period in question. The relief is available for tax periods ending on or before 31 December 2026. In addition to the Small Business Relief, Group Taxation Relief is available to members of a Tax Group, and Business Restructuring Relief is available for qualifying reorganisations.
8. How long must UAE businesses retain corporate tax records?
In general, a company must retain sufficient documentation to support the tax positions taken in a tax return for at least 7 years from the end of the relevant tax period. Maintaining the following documents can help a company retain the required information for the designated period: financial statements, invoices, bank statements, tax returns, contracts, payroll records and the corporate tax registration certificate.
To learn more about UAE Corporate Tax Return Filing: A Step-by-Step Guide to Navigating Tax Returns, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.