In order to ensure compliance with UAE's evolving tax landscape, Corporate Tax return filing has become a mandatory requirement established by the Federal Tax Authority (FTA) for all taxable persons operating within the country. For Indian businesses establishing their presence in the UAE, let us understand that failure to file tax returns can result in significant administrative penalties and substantial fines. The process involves submitting a comprehensive report to the tax authority that details the income and expenses of your UAE-based taxable person.
The Corporate Tax Return is filed by the Taxable Person for a specific tax period and contains detailed information about the Corporate Tax liability and payment obligations. The Tax Return must be filed within the stipulated period with the FTA in strict accordance with the Corporate Tax Law framework.
In case the Authority requests any additional information, supporting documents, or specific records, it must be submitted promptly by the taxpayer to the tax authority to ensure continued compliance.
Corporate Tax was first announced in January 2022 by the UAE's Ministry of Finance, with the comprehensive law going into effect for financial years starting on or after 1st June 2023. The standard rate stands at 9%, while annual taxable profits under AED 375,000 are subject to a beneficial 0% rate, which provides a significant advantage for Indian SMEs establishing their operations in the UAE.
Procedure of Corporate Tax Return Filing
The following are the procedures in filing a Corporate Tax return in UAE
Your company operating in the UAE must apply for a Tax Registration Number (TRN) from the Federal Tax Authority (FTA). This process involves submitting all required documents and comprehensive information through the official EmaraTax portal platform.
You must maintain proper and systematically organized records of all your company's financial transactions and tax-related documents, ensuring strict compliance with the UAE Corporate Tax laws and regulations.
Calculate your company's taxable income accurately and prepare the comprehensive tax return based on the detailed records you have maintained. It's crucial to account for any applicable deductions and exemptions as per the UAE Corporate Tax laws framework.
The completed Corporate Tax return must be submitted to the FTA through their official online platform, the EmaraTax portal, on or before the stipulated due date to avoid penalties.
You must pay the full tax liability as calculated in the Corporate Tax return on or before the official due date established by the authorities.
Be aware that in the case of a comprehensive tax audit, the FTA may request additional information or supporting documents from your company to verify the accuracy and completeness of the Corporate Tax return you have filed.
Basic Documents required to file for Corporate Tax
When a taxable person file for Corporate Tax return, it should include the following documents:
Corporate Tax filing deadlines for businesses with financial year ends of 31 March, 30 June and 31 December:
First Tax Period : 1 July 2023 – 30 June 2024
1 January 2024 – 31 December 2024
1 April 2024 – 31 March 2025
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