The United Arab Emirates (UAE) has recently implemented a corporate tax regime, requiring all eligible taxpayers to register and fulfill their tax obligations. In this blog post, we will delve into the key aspects of registration, filing returns, and tax liability and payment under the UAE corporate tax system.
Under the UAE corporate tax system, taxpayers must register for corporate tax, even if they are already registered for Value Added Tax (VAT). This registration is mandatory for all taxpayers and requires obtaining a Corporate Tax Registration Number. Additionally, the Federal Tax Authority may request certain Exempt Persons to register for corporate tax.
Taxpayers can conveniently register for UAE corporate tax electronically through the website of the Federal Tax Authority before filing their first corporate tax return. It is important to note that there is no registration threshold for UAE corporate tax, meaning all eligible entities must comply with the registration requirements.
For each tax period, only one UAE corporate tax return needs to be filed. This return is generally due within 9 months following the end of the tax period. Unlike some other tax systems, no provisional or advance corporate tax filings are required. The filing of corporate tax returns is done electronically, simplifying the process for taxpayers.
It is crucial to understand that taxpayers are required to file a corporate tax return, regardless of whether they have made a profit or not. Even if a taxpayer has incurred tax losses, filing a corporate tax return allows for the utilization of these losses to offset taxable income in future years.
Companies that meet the specified requirements can form a Tax Group and file a single UAE corporate tax return covering all the members of the group. This streamlined approach reduces administrative burdens and simplifies the tax compliance process. However, if companies are unable to form a Tax Group, each entity will be required to file a UAE corporate tax return on a standalone basis.
Tax Liability and Payment:
The UAE corporate tax system operates under a self-assessment regime, placing the responsibility of calculating, reporting, and paying taxes on the taxpayers themselves. Corporate tax liabilities generally need to be settled before the end of the 9 months following the conclusion of the relevant tax period.
Unlike other tax obligations in the UAE, such as VAT, businesses are not required to make advance corporate tax payments. The corporate tax liability for a tax period is usually due for payment by the end of the 9th month following the conclusion of the relevant tax period. Detailed information regarding approved payment methods will be provided by the relevant authorities.
Compliance and Penalties:
Similar to other tax systems in the UAE, businesses are subject to penalties for non-compliance with the corporate tax regime. It is crucial for taxpayers to understand and adhere to the compliance obligations imposed by the UAE corporate tax system. Further guidance on these obligations, as well as the applicable penalties for non-compliance, will be released by the relevant authorities in due course.
The introduction of the UAE corporate tax regime necessitates that all eligible taxpayers register and fulfill their tax obligations promptly. Understanding the registration process, filing requirements, and payment procedures is crucial for businesses operating in the UAE. By staying compliant with the corporate tax regime, businesses can ensure a smooth transition and avoid potential penalties. It is advisable to stay updated with the guidelines and announcements provided by the Federal Tax Authority to ensure proper compliance with the UAE corporate tax regulations.
Registered Tax Agency and Agents
Tax Agency Registration Name: PARKER RUSSELL OBAID AUDITING
Tax Agency Registration Number: 30000269
Tax Agent Registration Name: Mansour Abdulwahab Mohamed Ahmed
Tax Agent Registration Number: 20037867
To speak with our corporate tax expert kindly email us at: email@example.com or firstname.lastname@example.org