The UAE Corporate Tax Law (CT Law) introduces an income tax for corporations that is a federal system to the UAE. The law is applicable to all businesses operating within the UAE but with some exceptions. This blog article will deliver an overview of the main administrative and tax compliance obligations in the CT Law. 

Key Tax Compliances Under the UAE Corporate Tax Law 

The UAE CT Law outlines a variety of tax compliance obligations for tax-paying entities, such as: 

Tax Registration: Each tax-paying organizations must sign up with CT through the Federal Tax Authority (FTA) within 30 days after becoming liable for corporate tax. 

File tax return: Tax-paying entities have to submit CT returns electronically using FTA. FTA by the deadlines that are specified. 

Tax Payment: Tax-paying entities are required to pay their CT obligation within the stipulated deadlines. 

Record-keeping: Tax-exempt entities must keep exact and current records at minimum five years to back their CT tax returns. 

Tax Administration in accordance with the UAE CT Law 

The FTA is responsible for the administration of its duties under the UAE CT Law, including: 

issuing tax Regulations and rulings The FTA is authorized to issue rulings and regulations to deliver additional guidance regarding the application and interpretation to CT Law. CT Law. 

• Tax Audits: The FTA can conduct tax audits to confirm whether the CT returns have been filed in a timely manner. CT returns and to assess compliance with CT Law. 

• Tax Assessments: The FTA can issue tax assessments if it finds that a tax-paying entity has overstated its CT tax liability. 
• Tax disputes: Taxable entities are able to appeal tax penalties or assessments imposed by the FTA by using the process of dispute resolution that has been established.  

How to ready for Corporate Tax 

To warrant your company’s compliance with guidelines of the UAE Corporate Tax (CT) Law It’s essential to remain up-to-date with the most recent developments and to comply with the guidelines that have been established.  

Here’s a step-by step guide to benefit users navigate around the CT law definitely 

• Examine and study the Corporate Tax Law published by the Ministry of Finance to determine whether your business is in compliance with the conditions to be tax-exempt. 
• Go to for the Ministry of Finance and Federal Tax Authority websites for advice on the date for implementation when taxes will be applicable to your specific business or industry. 
• Know the most basic tax compliance requirements, such as the tax period and accounting and deadlines to file tax returns, and financial records to be kept. Both official websites grant the information needed to comply with tax laws. 
• Keep yourself informed of any new information or more instructions from tax authorities by regularly reviewing their websites. Because corporate tax in UAE is being introduced for the first time information may change as time passes. 
• Keep accurate financial documents adequate with perfect accounting practices as these are required to run a basic business operation as well as for taxes compliance needs. 

Financial Statements 

Financial statements are an essential aspect in the CT Law, as a taxpayer’s accounting earnings (profit or loss) according to the financial statements serves as the basis for calculating the taxable income. Taxable individuals who earn income that is not more than AED 3,000,000 during the tax period can utilize the basis of accounting based on cash. If a tax-paying individual’s earnings exceed AED 3,000,000 within the tax year they must create accounts together accounting principles based on the accrual method of accounting. 

Applications and Elections 

Taxpayers will have to apply for elections or take advantage of certain provisions in the CT Law. The elections can be conducted unilaterally by taxpaying persons and do not require the approval of the FTA. Examples of such elections are the relief for small businesses, exempting foreign permanent establishment income as well as the opportunity to pay corporate tax at a general rate if they’re qualified as a Qualifying Free Zone person. 

Applications for a tax exemption, however require an approval of the FTA. Examples of rules that require an application are the exempt of corporate taxes for particular categories of people as well as the tax treatment by a number of businesses as a single tax liable individual, and the formation of tax groups. 

Tax Returns and Payments 

Tax-paying taxpayers have to file their corporate tax returns and pay their corporate tax in the first nine months of the date of the applicable tax period. In the event of late filing or payment, it could be penalized. 

Clarifications and Assessments 

The CT Law provides mechanisms for taxpayers to get clarity regarding their tax situation upfront by submitting clarification requests, and also for the FTA to make reviews of a person’s corporation tax affairs in certain instances. 

General Anti-Abuse Rule 

The CT Law includes a general anti-abuse provision to stop the misuse of fraudulent deals or arrangements to gain the benefit of corporate tax that are not in line with the purpose in the statute. Compliance with taxes and tax administration is vital to the efficient functioning of any nation’s financial system. In the UAE it is the Corporate Tax Law governs the taxation of companies and corporations and provides exemptions for specific individuals and entities, defining the tax rates applicable to corporate entities and the definition of taxable people and tax-paying income. 

Your Corporate Tax Advisor in Dubai 

As companies adjust as they adjust to UAE CT Law, ebs chartered accountants are here to benefit you through the maze of tax administration and compliance. ebs chartered accountants is dedicated to offering our clients the highest-quality administration and tax compliance services. We keep up-to-date on the most recent developments in our understanding of the UAE CT regime and draw on our extensive knowledge to offer additional customized solutions that address the requirements of our clients. 

Contact us now to inquire regarding our UAE Corporate Administration and Tax Compliance services. 

FAQs  

What are the key corporate tax compliance requirements in the UAE?  

Key requirements include timely filing of tax returns, maintaining accurate financial records, and adhering to tax payment deadlines. 

How can businesses ensure tax compliance in the UAE?  

Businesses can ensure compliance by engaging with experienced tax advisors, staying updated on tax laws, and conducting regular internal audits. 

What are the consequences of non-compliance with UAE corporate tax regulations?  

Non-compliance may result in penalties, fines, legal actions, reputational damage, and potential business disruptions. It’s crucial to adhere to tax laws to avoid such consequences.