Your Complete Guide to UAE Corporate Tax Return Filing

Corporate Tax was introduced in UAE with effect from June 1st 2023, the key objective behind it is the country’s long-term economic vision and overall growth. Businesses conducted in the UAE must comply with UAE tax regulations. There are a few key points that should be followed while filing a Corporate Tax return. One of the most important aspects is accuracy and timely filings that ensure compliance and also help them avoid penalties.

Step 1: Determine Corporate Tax Eligibility

There are many misconceptions in the market due to several criteria related to checking the eligibility for filing Corporate Tax. First, check if you are subject to corporate tax. Here is the way-

• Corporate tax applies to Resident Juridical persons, Non-Resident persons with Permanent Establishment or nexus or sourced income in UAE and Qualifying Free Zone persons including offshore companies registered in the UAE.
• Natural persons conducting business or business activity in the UAE may also be subject to corporate tax if they fulfil a few conditions.

After confirmation that your business is exempt or not taxable due to qualifying conditions, you should make sure that it will be indicated in the registration details. It is advisable to get help from a professional tax consultant to confirm eligibility.

Step 2: How to register for Corporate Tax?

Corporate tax registration in the UAE is mandatory for every taxable person with the FTA. Registering includes the following steps-

• Prepare required documents such as trade license, company incorporation certificate, UAE financial account number (IBAN), company’s shareholder's identification documents etc.
• Login to the EmaraTax portal with your login credentials.
• Navigate to the corporate tax registration section, fill out the form and upload the required documents.
• Obtain the Corporate Tax Registration Number (TRN).

It is crucial to maintain proper records and financial statements as per IFRS standards. If you need assistance, Flying Colour Tax can help you with corporate tax registration and compliance.

Step 3: Identify your Tax Period

Mostly for many businesses, the by default tax period is as per the Gregorian calendar. However the financial year can be customized by the businesses by filing an application to the FTA, in that case, their tax period will be aligned to their financial year. Here is the way to clarify it-

• For companies following the calendar year, their tax period will be January 1 to December 31.
• For companies with a custom financial year, their tax period will be from the first day of the financial year to the last day.

Businesses must first check their tax period and they need to file the corporate tax return within 9 months of the end of the tax period. Here is an example- For a company whose tax period is ending on 31^st December 2024, their deadline for corporate tax return filing would be 30^th September 2025.

Step 4: Prepare Financial Statements

When it comes to corporate tax return filing, businesses must comply with the tax laws. Businesses must maintain proper financial records and books of accounts for at least 7 years after the tax period ends. They should keep in mind that the records must be as per the accepted accounting standard in the UAE which is IFRS. Key components include:

• Income Statement (Profit and Loss Statement)
• Balance Sheet
• Cash Flow Statement

It is advisable that your records must be organized and updated. You may get help from a corporate tax consultant to stay compliant with the regulations. You can choose Flying Colour Tax Consultant as your partner for accounting and financial reporting services.

Step 5: Calculate Taxable Income

As per UAE corporate tax law, the taxable income is the total income that is subject to tax, after accounting for adjustments, permissible deductions and exemptions.

Businesses in Free Zones must exclude qualifying income (taxed at 0%) and non-qualifying income (taxed at 9%). Take the help of a tax consultant to ensure the correct classification between these two types of income. If you wish to know more about 0% Corporate Tax for Free Zone companies  Read More

Step 6: Review Available Tax Reliefs

There are few reliefs for the businesses set by FTA, we need to check the eligibility.

• Small Business Relief: Businesses can claim this relief if their annual turnover is less than AED 3 Million* and it is available until the tax period ending on or before 31^st December 2026.
• Group Taxation Relief: Available for companies forming a Tax Group.
• Business Restructuring Relief: Applicable to qualifying mergers or restructuring activities.

It is essential to prepare relevant documentation while claiming the relief. Businesses can count on Flying Colour Tax consultants to maximize tax benefits.

Step 7: Prepare and Upload Required Documents

Following is the list of documents that need to be gathered-

• Financial Statements.
• Tax Loss Schedules (if applicable).
• Schedules for Related Party Transactions ( if applicable)
• Tax Credit Documentation.
• Relevant supporting documents for exempt income or tax reliefs.

You must be sure that documents are accurate and updated while filing returns.

Step 8: Complete the Corporate Tax Return on EmaraTax

Once the details are ready, start the form-filling process-

1. Log in to your EmaraTax account
2. Access the Corporate Tax Return section
3. Provide details
4. Attach supporting schedules and documentation
5. Double-check all the provided information and submit

Step 9: Pay the Corporate Tax Liability

After corporate tax registration and obtaining the Corporate Tax Registration Number (TRN), pay the corporate tax liability through:

• Bank transfer
• EmaraTax payymnet portal
• eDirham

The deadline for the tax payment is the same as for Corporate Tax Return Filing, ie. Within 9 months of the end of the financial year. Flying Colour Tax helps in filing returns on time and minimizing penalties.

Step 10: Maintain Records for Audit

The very critical step for most businesses is to keep proper records as per UAE regulations and it is mandatory to keep records for at least 7 years.

Records to be maintained include, but are not limited to;

• Financial statements
• Invoices and receipts
• Bank statements
• Tax returns
• Contracts and Agreements
• Payroll records

Maintaining accurate and organized records ensures smoother audits if inspected by FTA and also minimizes risks. Our professionals at Flying Colour ensure that you stay compliant at every point.

Common Pitfalls to Avoid

• Late Corporate tax registration: check eligibility and register as soon as possible.
• Incorrect tax return filings: Review all figures and disclosures.
• Failure to maintain proper records: Make sure that you maintain either a physical copy of a digital copy of all records up to 7 years from the end of the relevant tax year.
• Late filing or payment of tax: Once the financial year ends, within 9 months the tax return shall be filed and paid the tax liabilities, if any.
• Incorrect tax relief claims: Make sure all the expenses claimed in the Corporate Tax return comply with the Corporate Tax Law.

Conclusion

Overall, if you want to stay compliant with UAE regulations you must be updated with new laws. By filing taxes timely, paying dues on time, maintaining records as per IFRS standards and for at least 7 years, businesses can avoid penalties while focusing on financial growth.

As an expert tax advisory firm, Flying Colour Tax Consultant specialises in managing the corporate tax requirements of businesses including tax optimization, tax registration, tax filings, business structuring etc. We will be proud to be part of your business growth by making sure that the company is compliant to the law of the land. 

To learn more about Navigating UAE Corporate Tax: A Step-by-Step Guide to Filing Tax Returns, book a free consultation with one of the Flyingcolour team advisors.

Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.