Federal Tax Authority Decision No. 5 of 2023 stipulates the conditions for changing the tax period for corporate tax purposes. The decision puts a specific criterion for taxable persons to qualify for a change of their tax period, effective from 1st June 2023. Therefore, it is imperative for taxable persons to seek the services of tax consultants UAE to seamlessly determine their tax period and to stay compliant with tax standards.
Conditions for Change in Tax Period
As per the Federal Tax Authority Decision No. 5 of 2023, taxable persons can apply to the Authority to change their tax period's start and end date or employ a distinct tax period under specific conditions, which include:
Putting in line the taxable person’s financial year with that of a distinct resident person with an objective of creating a tax group.
Aligning the taxable person's financial year with that of its head office or parent company or for substantial economic, commercial or legal reasoning.
The Decision further stipulates that the taxable person should not have filed a tax return for the period they are seeking to change and that the taxable person must apply before the end of 6 months before the end of the initial tax period.
Whereas, if the taxable seeks to expand the present tax period, he may perform as such for a period that does not exceed 18 months.
In the same instance, taxable persons seeking to minimize the subsequent tax period can do as such for a period that ranges between 6 and 12 months.
Essentially, it is imperative to note that if a taxable person has already put in an application to minimize a tax period, he cannot form an additional application for a previous or present tax period.
Abrogation of Conflicting Provisions
The Federal Tax Authority’s decision stipulates that any conditions contradictory to or uncertain with the provisions of this decision shall be void and abrogated as the Decision comes into effect from the 1st of June 2023.
Seek the Expert Services of Tax Consultants UAE
The Federal Tax Decision No. 5 of 2023 furnishes detailed guidelines for taxable persons seeking to change their tax period and establishes that such changes have to be made upon valid and accurate conditions. Thus, it is advisable for taxable persons to seek the services of tax consultants in UAE to seamlessly determine their tax period and to stay compliant with tax standards. Therefore, contact us today and we shall be glad to assist you.
Mostafa is a qualified Tax Consultant with over 5 years of experience gained in diverse intricate tax matters, he has high expertise in conducting tax negotiations and investigations with the Federal Tax Authority and other external Tax Bodies. He has vast experience in drafting and reviewing tax documents. Mohammad has also advised on a plethora of tax matters, he draws much attention to tax filing procedures and to offering professional investigations to underlying tax complexities.