Corporate tax return filing in UAE

It is mandatory for companies registered for Corporate Tax in the UAE to file a tax return. Enterprises on the mainland, in free zones, and individuals that conduct licensed business and exceed a certain revenue limit, are taxable persons and, according to Federal Decree No. 47 of 2022, must register for tax purposes, obtain a tax registration number, prepare a tax return, and submit it by the due date. If taxpayers don’t meet these requirements they will be subject to significant fines.

Why is it necessary to file returns on Corporate Tax

Until recently, the Emirates had no taxes on companies’ incomes. In 2022, it was announced, and on June 1, 2023, a tax on profits from business activities was incorporated. The UAE aims to be removed from gray lists by enhancing its legislative system through the implementation of international practices. In doing so, the country demonstrates its eagerness to combat illegal activities and money laundering.

According to the above-mentioned law, all companies must pay a tax of 9% on profit if it is more than AED 375,000. Zero tax is levied on profits below this amount. However, all UAE taxpayers are liable to register with the tax authority, regardless of whether they pay 9% or 0%. Additionally, a new requirement was established by law to draw up and file one tax return per annum to the FTA of the UAE. Consequently, entrepreneurs are obligated to maintain thorough accounting and tax records to avoid errors in corporate tax filings and unforeseen expenses and fines.

Penalties for not filing Tax Returns

For failure to register with the tax authority in due course and, consequently, to submit tax returns and pay taxes, the law provides for a fine of 10,000 dirhams.

What companies are subject to Corporate Tax Returns?

All taxable entities, including those under preferential tax regimes or zero tax rates, must meet the requirement of filing a corporate tax return..

• Mainland companies
• Free zone firms, even those meeting the criteria for qualifying activities
• Freelancers who earn more than 1 million dirhams of revenue
• Foreign businesses with a permanent presence in the UAE and locally generated income 
• Persons exempted by the Ministry of Finance

Foreign companies in offshore zones are exempt from this obligation since they do not conduct business in the UAE and therefore are not considered taxable persons and don’t follow the rules of the corporate tax law.

Deadlines for Tax Returns 

• Nine months following the conclusion of the applicable fiscal period. This timeframe pertains to the fiscal year corresponding to the prepared financial statements.

The corporate tax return is submitted annually, and no provisional or advance filings are required.

• For companies whose tax period began on June 1, 2023, the deadline for filing the tax return will be February 28, 2025.
• If the tax period started on January 1, 2024, the last day for the corporate tax return is September 30, 2025.

Please note that MoF stipulated that registration must be completed in 2024. The deadlines depend on the month in which the company obtained its license. Find out all the registration details for corporate tax.

Tax Returns for groups of companies and multiple businesses

• In the UAE, businesses have the option to form a tax group if the parent company holds a minimum of 95% of the share capital and voting rights of each subsidiary. Under these conditions, a unified tax return is produced for the entire group.
• Individuals involved in multiple business activities submit a single tax return, incorporating income and expenses from all ventures.

To-do list to file Corporate Tax Return 

If you want the filing process to go smoothly, you need to take actions in advance that will lead to a guaranteed result:

1. Register for Corporate Tax. This is done on the EmaraTax portal. To learn more go to the FTA website. Or you can consult experts from our company.
2. Maintain accounting records. According to the 2015 Companies Law, all companies in the UAE must keep records for bookkeeping purposes. Even if a taxpayer is not obligated to do so (e.g., freelancers), accounting and bookkeeping are necessary for accurate calculation of income and expenses and preparation of tax returns according to requirements. The most cost-effective way is to outsource accounting services, especially when they are not required frequently.
3. Compile the Tax Return. Calculate the taxable income. For tax purposes it is the net profit or loss adjusted for specific items.
4. File the document to the FTA using the EmaraTax platform.
5. Pay the Corporate Tax by the specified deadline.

Tax accounting 

Corporate tax filing requires several key documents to accurately report income, deductions, and credits. Essential documents include financial statements such as

• the balance sheet, 
• income statement, and 
• cash flow statement. 

Additionally, businesses need records of expenses, receipts, and invoices to support deductions claimed.

Other important documents include payroll records, depreciation schedules, and any documentation related to investments or asset sales of the company. 

Corporations must also provide documentation for any tax credits or incentives they plan to claim. 

Some businesses may be required to submit documentation regarding transfer pricing along with their corporate tax return. However, those qualifying for Small Business Relief are not obliged to do so.

Lastly, legal documents such as articles of incorporation and any relevant agreements should be readily available for reference during the filing process. Efficiently organizing and maintaining these documents is crucial for smooth and accurate filing of the corporate tax return.

Emirabiz services for Tax Return filings 

The tax consultants at Emirabiz have vast expertise to provide prime services for filing corporate tax returns in Dubai and the UAE, ensuring compliance with legislation and incorporating the latest updates. Whether you need a comprehensive package of tax return-related services or assistance with a specific aspect of filing your return, give us a call, and we'll take care of your needs!