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Guide to the UAE Corporate Tax Filing

The newly affected corporate tax statute prescribes tax activity in the UAE. Companies are compelled to enforce compliance with the UAE Federal Tax Authority’s regulations and standards, to which noncompliance accrues hefty fines. Thus, companies in the UAE are highly advised to outsource expert tax services from trusted tax consultants in UAE to avert non-compliance to tax regulations. This article seeks to simplify the corporate tax filing procedure.

Scope of the UAE Corporate Tax

  • A corporate tax rate of 9% is levied on businesses with annual profits exceeding AED 375,000. 
  • A 0 rate is applicable for businesses that have taxable income less than AED 375,000

Companies Subject to the UAE Corporate Tax Are:

  • Companies and judiciary persons that fall under the cognizance of the UAE laws and regulations
  • Natural Persons who conduct business or business activity in the UAE
  • Legal companies that have a permanent establishment of their branch in the UAE and non-residential judiciary persons as included as well.

Free zone entities will also be included under the umbrella of corporate tax. However, any Free zone companies that fall under the "Qualifying Free Zone Person" criteria can claim the 0% tax rate on their income. For Free zone companies to fall under the umbrella of "Qualifying Free Zone Person", they should have the following condition;

  1. They must comply with the standard transfer pricing requirement of Corporate Tax Law
  2. They should not have conducted any elections subject to the corporate tax rate.
  3. They have qualifying income
  4. Maintain adequate substance in the UAE. 

Read More: Will the Banking Sector be Subject to the UAE Corporate Tax Regime?

Guide to UAE Corporate Tax Filing

Like VAT, UAE companies must register with the Federal Tax Authority to receive a Corporate Tax Registration Number. 0% tax rate and exempt persons may also be required to get a Tax Registration number.

  • The Tax return must be filed nine months after the relevant Tax Period under the Gregorian calendar of 12 months.
  • The Corporate Tax Payable for the tax period. In the case of a parent company, it must file corporate tax on behalf of the group.
  • The financial statement submission must include the period of the statements and the accounting standard used for reporting. It must highlight the taxable income for the tax period as per the financial statements. For a partnership business, the total assets, liabilities, income, and expenditure of an unincorporated partnership show the partner's share.
  • Following tax schedules must be included while filing corporate tax in the UAE.
  • The exact amount of tax relief claimed under Article 37, clause 1. The article States that the Tax loss can be offset against the Taxable Income for the subsequent period until there is taxable income in the future tax periods.
  • The amount of Tax Loss transferred under Article 38 of the Federal Law Decree Law No-47 of 2022, where the TAX Loss can be transferred to taxable entities where they are a minimum of 75% direct or indirect ownership interest in the tax loss entity
  • Similarly, Tax credits are claimed under Article 46 & Article 47 of the same law.

Seek the Expert Services of Top Tax Agents in the UAE

Since the UAE Corporate Tax is a new phenomenon to a number of entities, companies ought to conduct a feasibility study to understand the impact of Corporate Tax on their businesses and to maintain tax compliance. Therefore, it is essential to seek expert consultation from trusted and reputable tax agents in UAE to combat probable tax complexities, contact Farahat & Co today and we shall be glad to assist you!  

Read More : How to Prepare Accounting and Bookkeeping for Corporate Tax in UAE

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.