Stay Compliant With UAE Tax Laws!

How To File Corporate Tax Return In UAE?

Businesses in the UAE must file corporate tax returns not only to fulfill financial obligations but also to stay legally compliant and avoid fines. As per the Federal UAE Corporate Tax Law, which applies to financial years beginning on or after June 1, 2023, companies across all Emirates are required to adhere to corporate tax regulations.

Corporate Tax Return Filing In UAE

Adnan Ahmed

This law covers all business and commercial activities, requiring companies to register for a corporate tax number and submit corporate tax returns to the Federal Tax Authority (FTA). Non-compliance may lead to fines and penalties.

It is observed that entrepreneurs struggle to deal with the complexities of corporate tax return filing due to strict filing deadlines and the consequences of non-compliance. To address all these aspects, this article covers everything about filing corporate tax returns in the UAE.

We explain who is required to file corporate tax, the step-by-step process, necessary documentation, and penalties for non-compliance. Our experts at Now Consultant assist you in addressing the legal and financial requirements of corporate tax in compliance with UAE regulations.

What Is a Corporate Tax Return Filing In UAE?

Filing the corporate tax return means providing income details and financial statements to the Federal Tax Authority (FTA) for tax calculation and payment. Introduced in June 2023, the UAE’s Federal Corporate Tax Law mandates all eligible entities earning taxable income above AED 375,000 to pay corporate tax at a standard rate of 9%.

The taxable person must file the corporate tax return, providing information about the tax liability and payment for a specific tax period. Businesses must complete this process within the deadline set by the Corporate Tax Law.

Who Is Required to File a Business Tax Return In UAE?

The following individuals and businesses are required to file corporate tax returns in the UAE:

1. UAE-based Companies

All UAE-based companies, regardless of their size or industry, must submit corporate tax returns. This includes companies operating on the mainland and Free Zones in the UAE.

2. Foreign Companies

Foreign companies also need to file corporate tax returns if they have a direct or indirect tax presence in the UAE. This involves permanent establishment in the UAE or those earning income from UAE sources without a physical presence.

3. Free Zone Companies

Free Zone companies have to file corporate tax returns in certain conditions, even if they enjoy tax benefits or exemptions. This is especially necessary if they conduct business outside the Free Zone or earn income that does not meet tax exemption criteria.

4. Individuals Engaged in Business Activities

Self-employed individuals and business owners must file corporate tax returns if their business income exceeds a specific threshold defined in the UAE Corporate Tax Law. This applies to sole proprietors or individuals in partnerships.

How To File Corporate Tax Return In UAE? Step By Step Guide!

Corporate tax returns are filed online using the EmaraTax portal of FTA. The following is the step-by-step process for corporate tax return filing in UAE:

Step 1: Determine Corporate Tax Obligations

The first step is to determine if your business is subject to corporate taxation as per UAE laws. For that purpose, you need to assess your income sources, identify any tax exemptions, and understand the tax rates that apply.

Step 2: Register with the FTA

In the second step, businesses must register for corporate tax with the Federal Tax Authority (FTA) via the EmaraTax portal to receive a TRN, which is required for tax filing. This TRN is mandatory for proceeding with the corporate tax filing process.

Step 3: Maintain Financial Records

Proper record-keeping is necessary to comply with UAE tax laws. You should have complete records of all financial transactions, income sources, and tax-related documents. These records help calculate accurate taxable income and assist in preparing your tax return while minimizing errors or discrepancies.

Step 4: Determine Taxable Income

In this step, you need to determine the taxable income for corporate tax returns. To calculate taxable income, you should review your financial statements and deduct any allowable expenses or exemptions under UAE tax regulations from your total revenue.

Step 5: Complete the Corporate Tax Return

When you maintain all financial records and the tax amount accordingly, you now need to log in to the FTA’s e-services through the EmaraTax portal to complete your corporate tax return. Here, you need to fill in all required information, including your taxable income, deductions claimed, and the final tax payable.

Step 6: Submit Tax Return

You should submit your tax returns through the FTA’s online platform, and it is important to file within the specified deadline to avoid penalties. Before submitting your tax return, you should confirm that all entries are accurate and meet the regulatory requirements.

Step 7: Pay the Tax Liability

After submitting your tax returns, you have to pay the tax liability through the online system on or before the deadline outlined by the FTA. It is important to pay the tax amount on time to avoid fines or suspension of your business operations.

Step 9: Prepare for a Tax Audit (if necessary)

The FTA may conduct audits to verify compliance and the accuracy of filed tax returns. For that purpose, FTA requires you to provide additional documentation or clarifications regarding your financial records and tax calculations.

By following these steps, UAE businesses can confidently complete the corporate tax return filing process while ensuring compliance with the tax regulations.

Requirements for Corporate Tax Return Filing

Businesses must meet specific requirements when filing corporate tax returns, including:

1. Tax Registration Number (TRN)

Before filing tax returns, you have to register your company with the FTA for tax purposes and obtain your business’s tax registration number (TRN).

2. Details of Taxable Person

You should provide accurate details of the taxable person, such as name, address, phone number, etc.

3. Tax Period Information

You should clearly specify the tax period for which the corporate tax return is being filed.

4. Accounting Method

You have to clearly state the accounting method used in financial reports.

5. Audited Report

For larger businesses, the FTA demands audit reports approved by licensed professionals.

6. Supporting Documents

The following are the supportive documents for filing corporate tax returns:

Financial records which present a clear overview of your business activities.
Taxable income calculations showing adjustments from the accounting net results.
Records and devaluation plan to account for the depreciation of tax-related assets.
Details of transactions with related parties.
Transfer pricing records
Movement of provisions to summarize adjustments and changes in financial allocations.

It is mandatory to fulfill the above requirements and maintain these documents accurately to ensure the tax filing process complies with UAE tax regulations.

New Corporate Tax Return Filing Deadlines In UAE:

In the UAE, businesses must follow corporate tax filing deadlines based on their financial year. They have up to nine months after the end of their financial period to submit their tax returns and pay the required corporate tax to the Federal Tax Authority.

If a company’s first tax period began on June 1, 2023, it must submit its return by February 28, 2025. For a company with its first tax period beginning on January 1, 2024, the deadline to file corporate tax returns is September 30, 2025.

Missing the corporate tax filing deadline can lead to penalties or even the suspension of business operations. Therefore, businesses need to ensure timely compliance.

Penalties for Non-Compliance:

If you fail to adhere to the UAE’s corporate tax regulations, it can result in significant penalties, as given below:

Late Filing Penalties:

The FTA imposes AED 500 for each month during the first 12 months after the deadline. From the 13th month onward, the penalty increases to AED 1,000 per month.

Incorrect Filing Penalties:

The incorrect filing penalties apply if businesses submit inaccurate information in their tax returns.

You can avoid these costly penalties by following the step-by-step process of filing corporate tax returns before the deadline is over.

Common Challenges While Tax Filing In UAE:

The following are the challenges faced by businesses while filing corporate tax returns in the UAE:

Complex Tax Structures: It is difficult for entrepreneurs to understand the legal framework and corporate tax structure in the UAE.
Miss the Deadlines: Businesses may miss the deadlines for registering corporate tax, which leads to penalties.
Inaccurate Filing of Tax Returns: Businesses may file incorrect tax returns, which can result in penalties and tax-related issues.
Unnecessary Tax Liabilities: Entrepreneurs who fail to take advantage of available tax deductions or incentives, such as small business relief, can add unnecessary tax liabilities.
Inaccurate Record-Keeping: Businesses having inaccurate or incomplete record-keeping can lead to difficulties in tax filings and potential audits.
Strict Documentation: It may be challenging for entrepreneurs to gather all necessary documents to meet corporate tax requirements.
Lack of Expert Guidance: Businesses in the UAE face various compliance and tax issues due to a lack of expert guidance.

These challenges can be encountered with expert guidance while filing tax returns to avoid the risk of penalties and the unnecessary burden of taxes.

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Get Expert Help to File Your Tax Returns!

Expert guidance is mandatory for filing corporate tax returns in the UAE to maintain your business operations in the UAE. At Now Consultant, we provide complete support to simplify every step of filing corporate tax returns for your business. We ensure that your business adheres to the UAE regulations.

Whether it is meeting your tax obligations, maintaining accurate financial records, or submitting your tax return to FTA, our experts help you with accuracy. We help entrepreneurs handle corporate tax challenges, such as missed deadlines and incorrect filings, to avoid penalties and mitigate financial risks.

Frequently Asked Questions

Can I file my corporate tax return online?

Yes, the Federal Tax Authority (FTA) provides an online EmaraTax portal for businesses to register, complete, and submit corporate tax returns easily. This system ensures an easy filing process, reducing paperwork and improving accuracy.

What happens if I miss the tax filing deadline?

If you miss the deadline, it can lead to hefty fines, penalties, and even suspension of business operations by the FTA. The penalty starts at AED 500 per month and increases after 12 months

Are Free Zone companies required to file a tax return?

Yes, Free Zone companies must file corporate tax returns, even if they enjoy tax incentives. Only Qualifying Free Zone Persons meeting specific conditions may benefit from 0% corporate tax, while others may be subject to standard tax rates.

What documents are required for corporate tax filing?

The required documents for corporate tax include financial records, taxable income calculations, depreciation plans, related party transactions, transfer pricing, and provisions movement summaries.

Can I revise a corporate tax return after submission?

Yes, businesses can correct errors by submitting a revised corporate tax return through the FTA portal within the allowed correction period.