Corporate Tax Return UAE: What You Need to Know Before Sept 30’2024

UAE Corporate Tax Filing: 2024 Return Due Date is Sept 30

The UAE’s introduction of a corporate tax is a significant step towards a more diversified economy. Effective from 1st June 2023, the new tax regime applies to businesses with annual taxable income exceeding AED 375,000. This landmark change aligns the UAE with international tax standards while offering competitive rates to attract foreign investment.

The Federal Tax Authority (FTA) in the United Arab Emirates (UAE) has recently issued a Public Clarification (CTP003) that clarifies the first tax period under the Corporate Tax (CT) regime. In response to this clarification, the FTA has updated the Tax Registration Certificate to reflect the correct first tax period. The submission deadline for the first CT return has been revised from September 2025 to September 30, 2024. Furthermore, the FTA has made the CT return form available for entities incorporated in June 2023, enabling them to comply with the requirements of the Public Clarification.

The tax return under Corporate Tax law is required to be filed within 9 months from the end of the tax period. Thus, the first tax return under Corporate tax law is required to be complied within 9 months from the end of the first tax period applicable to the taxable persons. As per the clarification issued, the First Tax Period should be between 6 and 18 months.

To whom is the due date of 30^th September 2024 applicable?

• To all entities incorporated on or after 1^st June 2023 and up to 1^st July 2023, & that follows a financial period of January to December, the first financial year would be from such date of incorporation up to the 31^st December of 2023. Such first financial year would be a period ranging from 6 to 7 months. In such cases, the First Tax period would be the same as the first Financial year.
• The first Tax return for such entities would be 30^th September 2024, i.e 9 months from the end of the First Tax Period – From the date of incorporation up to 31^st December 2023.

Penal consequences on late submission of return/incorrect submission of return:

1. Late submission of Corporate Tax return

The below-mentioned penalties would be attracted:

• AED 500 for each month, or part thereof, for the first twelve months.
• AED 1000 for each month, or part thereof, from the thirteenth month onwards.

This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return should have been submitted. In case the Legal representative delays the submission of Tax return, the penalty should be paid by such legal representative from his own funds.

 

2. Submission of Incorrect Corporate Tax Return

Penalized with AED 500, unless the Person corrects his Tax Return before the expiry of the tax return submission deadline prescribed under the Corporate Tax Law.

 

3. Failure to settle the tax payable

Penalty at 14% per annum on unsettled tax amount for each month or part thereof, for the period of delay. Such period is computed from the day following the due date of payment until the date of settlement of tax.

Where Due date of payment would be as follows:

• 20 Business Days from the date of submission, in the case of a Voluntary Disclosure.
• 20 Business Days from the date of receipt, in the case of a Tax Assessment.

 

While the UAE’s Federal Tax Authority (FTA) hasn’t explicitly outlined a formal process for amending corporate tax returns, it’s generally advisable to consult with a tax professional before filing the CT return.

Avoid hefty penalties! Find out what corporate tax mistakes could cost you and how to stay compliant.

In conclusion, while UAE corporate tax return filing may seem complex, seeking the assistance of professionals like BCL globiz can significantly simplify the process and help you avoid costly mistakes. Our expertise and guidance can ensure that your business remains compliant with the law and minimizes its tax burden.