How to Navigate Corporate Tax Filing Requirements?

Written By Akshaya Ashok, Reviewed By Reyees K P

Published on 29/01/2025

As a business owner in Dubai, have you ever wondered about the intricacies of corporate tax filing requirements? you have a new challenge: dealing with corporate taxes. Starting June 1, 2023, Dubai has a corporate tax of 9% on taxable income. It is crucial to understand how to file your taxes. You want to avoid penalties and make sure you're following the rules. Plus, a good tax strategy can save you money.

So, where should you start? In this blog, we'll help you figure out the corporate tax system in Dubai. We'll cover how to register, file your tax return, payment details, and more. This allows you to focus on building your business without worrying about corporate tax filing requirements.

Corporate Tax Law in Dubai

As a business owner in Dubai, you're likely eager to understand the UAE Corporate Tax Law, which marks a significant shift in the country's tax landscape. Imagine you're turning the pages of a book, and with each turn, you're uncovering the details of this new law.

A New Tax Regime

The UAE Corporate Tax Law introduces a federal corporate tax regime, replacing the existing tax environment. This new regime aims to promote economic growth, transparency, and compliance.

Tax Rates and Exemptions

As you delve deeper into the law, you'll discover that it imposes a standard tax rate of 9% on taxable income. However, there are exemptions for certain businesses, such as:

• Small businesses with taxable income below AED 375,000
• Businesses engaged in specific activities, like the extraction of natural resources

Effective Date and Applicability

The UAE Corporate Tax Law came into effect on June 1, 2023, and applies to financial years starting on or after that date. This means that businesses in Dubai must comply with the new law for their financial year 2023-2024 and onwards. As you close this chapter, you now have a better understanding of the UAE Corporate Tax Law and its implications for businesses in Dubai. But, there's more to explore – let's dive into the corporate tax filing requirements in Dubai.

Registration Requirements for Corporate Tax

• Registration Timeline: Businesses must register for corporate tax within a specified timeframe, typically within a certain number of days from the commencement of business.
• Required Documents: Businesses must submit required documents, such as:
  
  
• Trade license
• Commercial registration
• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Passport copy of the authorized signatory
  
  
• Registration Process: Businesses can register for corporate tax through the Federal Tax Authority (FTA) portal or a registered tax agent.

Tax Return Filing Requirements

• Tax Return Form: Businesses must file a corporate tax return form, which will be made available on the FTA portal.
• Filing Deadline: The tax return filing deadline is typically within nine months after the end of the financial year.
• Filing Frequency: Businesses must file a corporate tax return annually.
• Required Information: Businesses must provide required information, such as:
• Business details
• Financial statements
• Tax computations

What are the Payment Requirements for Corporate Tax?

• Installment Payments: Businesses must make installment payments throughout the year, with the final payment due within nine months after the end of the financial year.
• Penalties: Penalties may apply for late payment or non-payment of corporate tax.
• Interest: Interest may apply on late payment or non-payment of corporate tax.

Record-Keeping and Documentation Requirements

1. Record-Keeping: Businesses must maintain accurate and detailed records, including:

• Financial statements
• Tax computations
• Supporting documentation

2. Documentation: Businesses must retain documentation supporting their tax return, including:

• Invoices
• Receipts
• Bank statements

Taxable Income and Deductions

Taxable income refers to the portion of gross income that is taxed. It is calculated by taking the adjusted gross income (AGI) and subtracting allowable deductions. This includes various forms of income such as wages, salaries, bonuses, tips, investment income, and other unearned income like canceled debts or government benefits. In essence, taxable income represents the income over which the government imposes tax liabilities.

Allowable Deductions and Exemptions

Deductions reduce taxable income and can include standard deductions or itemized deductions. Standard deductions are fixed amounts set by tax authorities, while itemized deductions can vary based on individual expenses such as mortgage interest, medical expenses exceeding a specific threshold, and charitable contributions. Additionally, exemptions may apply based on personal circumstances, such as dependents or specific tax statuses that can further lower taxable income.

 Treatment of Losses and Carry-Forward

Businesses can offset taxable income with losses incurred in previous years through a mechanism known as "carry-forward." This allows companies to apply a net operating loss (NOL) from one year to future tax returns, reducing taxable income in those subsequent years. The ability to carry forward losses helps businesses manage fluctuations in income and provides relief during less profitable periods.

Corporate Tax Compliance and Penalties

Compliance with corporate tax filing requirements is crucial for businesses to avoid penalties and ensure they fulfill their legal obligations. Timely filing of tax returns allows corporations to maintain good standing with tax authorities and avoid complications that could arise from non-compliance.

Penalties for Non-Compliance

Corporations face several penalties for non-compliance, including:

• Late Filing Penalties: Charges imposed when tax returns are filed after the due date.
• Late Payment Penalties: Fees incurred when taxes owed are not paid by the deadline.
• Incorrect Returns: Penalties for filing inaccurate information on tax returns can also apply, potentially leading to audits or further scrutiny by tax authorities.

Interest on Late Payment

In addition to penalties, corporations that fail to pay their taxes on time may incur interest on the unpaid amount. This interest accumulates over time, increasing the overall liability that the corporation must settle with tax authorities. This further emphasizes the importance of timely compliance with tax obligations.

Conclusion

We've learned about corporate tax filing requirements. We covered Corporate Tax registration, Corporate tax return filing, payment, and keeping records. It is critical to follow these guidelines to avoid penalties. Getting help from a pro can make a big difference. Reyson Badger is someone you can trust for advice on tax matters.

Corporate tax is now part of doing business in Dubai. Companies need to adjust to this change. Staying informed and following the rules can help companies to find new chances to grow. With the right support, Dubai's active market can stay strong, and businesses can do well in this new tax setup.

FAQs

Where can I find the most up-to-date information on the Corporate Tax filing deadline?

The Federal Tax Authority (FTA) website is the official source for the most accurate and up-to-date information on corporate tax filing deadlines and any potential changes.

Can I get an extension for the corporate tax filing date?

In certain circumstances, you may be able to request an extension for the corporate tax filing date from the Federal Tax Authority (FTA).

When is the corporate tax filing deadline for the 2025 financial year?

The corporate tax filing deadline for the 2025 financial year is typically nine months after the end of the financial year. This means that if your financial year ends on December 31, 2025, you generally have until September 30, 2026, to file your tax return.

What do I need to file corporate taxes?

You'll need financial records (income statements, balance sheets), tax forms specific to your business structure, and potentially supporting documentation like invoices and receipts.

Is there any corporate tax filing template in Dubai available to help me prepare my return?

Yes, the Federal Tax Authority (FTA) in the UAE likely provides corporate tax filing templates on its official website. These templates can assist you in accurately completing your tax return by providing a structured format and guidance on the information required.

Written By

Akshaya Ashok

Akshaya Ashok is a content writer specializing in creating content focused on accounting and auditing. With over two years of experience, she has developed expertise in crafting professional content for the financial sector.