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Establishing the Corporate Tax Period in UAE and the Submission Deadline

Running a business requires understanding of taxes. Businesses who conduct business in the UAE must be familiar with the country’s tax laws, including the recently implemented corporate tax. We shall examine the specifics of corporation tax, its tax year, and the submission deadline in this post.

The UAE government has implemented a new business tax system in an effort to adhere to international standards. UAE wants to change the perception that its economy is solely dependent on oil by implementing such a tax system. To diversify its revenue streams, the government has been investing in innovation and technology. To further encourage company growth, the government has been implementing tax reforms.

With the implementation of the VAT in 2018, the change got under way. This process has progressed with the introduction of corporate tax. The announcement about the implementation of corporate tax on January 31, 2022, was issued by the Ministry of Finance. The implementation of such a tax is anticipated to start in June 2023, with the start of the new fiscal year.

How to Determine the Corporate Tax Period in UAE

The financial year or portion thereof for which a tax return must be made is referred to as the taxable period of a taxable person.

The Gregorian calendar year or the twelve (12) month period for which the taxable person prepares their financial statements shall be considered the corporate tax period or financial year of a taxable person under this decree.

A taxable person has the option to apply to the authority for a change in his tax period, which could include a different tax period or a change in the start or end date. The restrictions imposed by the authorities apply to this alteration.

The submission deadline

A taxable person is required to file his tax returns with the authorities in the manner specified by them, in accordance with Article 51 of this Decree. A return of this kind must be submitted no later than nine months after the conclusion of the applicable tax period, or on the date specified by the authority.

The following examples can be used to better understand how this system operates:

When the fiscal year expires on May 31:

The first tax period will be from June 20, 2023, to May 31, 2024, as the Corporate Tax Law will go into effect on June 1, 2023. The same’s return filing deadline is set for February 28, 2025.

In the event that the fiscal year ends on December 31:

The Corporate Tax Law will take effect on June 1, 2023, although such a corporation will be subject to it starting on January 1 of the next financial year, 2024. The initial tax year will run from January 1 to December 31, 2025. The deadline for filing returns is September 30, 2026.

Businesses with accounting periods of June 1 through May 31 will have a 26-month registration window. Additionally, a company whose fiscal year runs from January 1 to December 31 will have 33 months to register.

The following details should be included in the tax return that is subsequently filed:

  • The taxable person’s name, residence, and tax identification number.

  • The day that the tax filing is completed.

  • The accounting methodology applied in the financial statements.

  • The fiscal year for which the tax return is appropriate.

  • The amount that is taxable for the aforementioned tax year.

  • The amount of tax loss relief that a taxable person has claimed.

  • The amount of the transferred tax loss.

  • Tax credits that are offered.

  • The last corporation tax that must be paid at the end.

The taxable person is required to comply with the authorities and give any information, papers, or records that are needed for the application of the decree law’s terms.

As an exemption to this rule, the minister may specify the format in which the tax return must be filed with the authority of the taxable person if the revelation of the information threatens national security or is against the public interest.

To sum up, understanding the corporation tax legislation and its complexities is crucial for businesses operating in the United Arab Emirates. The companies must be informed of the tax period and the submission date in order to abide by the rules and submit their tax returns on time and avoid penalties. A thorough understanding of the aforementioned subjects can ensure that a firm runs well.

How can maxim assist you with filing your corporate taxes?

Maxims is an expert in filing company taxes and can help you comply with your tax responsibilities quickly. We will make sure that all of your tax forms are correctly filled out and timely submitted, as well as that your financial records are accurately preserved. To reduce your tax liability, our team of seasoned accountants will work directly with you to comprehend your business and find all appropriate tax deductions and credits. In order to assist you in reaching your long-term objectives and making wise financial decisions, we also offer advice on tax planning methods. Allow maxims to handle your corporation tax submissions and assist you in remaining in compliance with the law.