A corporate tax declaration under UAE corporate tax law serves as a formal statement that obliges taxpayers to report their corporate tax liability and subsequently settle the due amount with the Federal Tax Authority (FTA). The essential components encompassed within this declaration consist of the taxpayer’s identity details, including name and address, alongside the crucial tax identification number (TIN). Additionally, it should indicate the specific tax period to which the declaration pertains, presenting the taxable income for that duration. The applicable corporate tax rate, tax payable, any tax credits or relief claimed, as well as withheld or paid taxes, must be meticulously delineated. Calculating the net corporate tax, whether due or refundable, is a fundamental step in this process. To adhere to the regulatory framework, the declaration must be electronically submitted through the FTA’s website within four months subsequent to the closure of the respective tax period. Furthermore, the submission necessitates the attachment of the audited financial statements and any additional supporting documentation stipulated by the FTA.
Tax regulations are significant for any business operating in a dynamic economic environment like the UAE. One such important component is the submission of Corporate Tax Returns, as outlined in Article 53 of the Corporate Tax framework.
These submissions, alongside the accompanying disclosures, play an indispensable role in upholding the effective administration and enforcement of Corporate Tax regulations.
Article 53 mandates a fundamental obligation on Taxable Persons. The submission of Tax Return within nine months is mandatory for each Tax Period from the conclusion of the related Tax Period. For clarity, if a Tax Period concludes on December 31 in Year One, the Tax Return must be lodged by September 30 in Year Two. This clause further grants the Authority the flexibility to establish an alternative filing deadline, taking into account the specific circumstances of a given entity.
Prerequisites for Data Inclusion
Clause 2 outlines the specific, mandatory information that Taxable Persons must provide to the Authority as an integral part of their Tax Return. This encompassing information includes:
It is the obligation of Taxable Persons to provide the Taxation Authority with any records, information, or documents required for the effective enforcement of UAE Corporate Tax. This requirement necessitates the inclusion of such information, documents, or records within the Tax Return or their provision upon request by the Authority.
When a Taxable Person’s standard information disclosure might compromise national security or contradict the public interest, Clause 4 empowers the Minister to establish alternative information disclosure mechanisms for such entities. This provision allows the Minister to define alternative formats or methods, or both, for the submission of Tax Returns or other essential information to the Authority, ensuring the delicate balance between transparency and security.
Under Clause 5, individuals or entities exempt from Corporate Tax by application, as per Article 4(1)(e) to (i) for instance (e) encompassing Qualifying Public Benefit Entities, (f) Qualifying Investment Funds, (g) Pension or social security funds, (h) Juridical entities incorporated in the UAE that are under complete ownership and oversight of designated Exempt Persons, and (i) Any other individual or entity are required to file a declaration if Authority require so. This declaration serves as a middle ground, offering the Authority the information necessary to verify that these Exempt Persons continue to meet the conditions for exemption from Corporate Tax while alleviating their compliance burden.
As members of a Tax Group are viewed as one single Taxable Person, Clause 7 clarifies that the Parent Company of a Tax Group bears the responsibility for submitting the Tax Return to the Authority on behalf of the entire Tax Group. This aligns with the Parent Company’s role as the representative of the Tax Group, as articulated in Article 40. By understanding its intricacies, businesses can ensure they meet their obligations while streamlining the submission of Corporate Tax Returns. These provisions not only help maintain transparency but also safeguard national interests and balance the compliance burden for different entities.
To effectively determine taxability in compliance with the corporate tax law, businesses are advised to avail the services of top Tax Consultants in UAE. Thus, contact us and we shall be glad to assist you.
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