Corporate Tax Timeline for Businesses as per Corporate Tax Law in UAE

The UAE Corporate tax rate on business profits will be implemented by the UAE’s Ministry of Finance as of June 1st, 2023. Corporate Tax in UAE has received a great deal of interest worldwide since its publication date. UAE is the fourth GCC nation to implement the Corporation’s Federal Income tax. The main goal of implementing Corporate Tax is to strengthen UAE’s reputation as a major international economic center and quicken the speed of development throughout the entire nation.

By avoiding damaging tax methods, the corporation tax aids the UAE to adhere to global criteria for tax disclosure. Understanding how corporate taxes affect a company’s functioning and how to deal with them can be challenging for corporations.

What is the tax timeline for businesses?

After enrolling for corporate taxation in the United Arab Emirates, each liable entity is obligated to compile and remit corporate tax. According to the terms of Federal Decree-Law No. 47/2022, a corporate income tax return must be filed nine months before the completion of the fiscal year[1]. The timeframe for paying corporation tax for the specific financial year for one that the corporate income tax return is decided to file will be the same. The scenarios that follow will help to more readily demonstrate some potential time frames, due dates, and tax seasons. Let’s take a deeper look at it;

  • If 21st June 2023 is starting date of the financial year regarding your business, and 31st May 2024 is the ending date, then you have to stick with the following time frame for corporate tax matters as a whole;
  • The 1st tax duration will run from 1st June 2023 to 31st May 2024, following which the corporate will determine if it has managed to fetch taxable revenue or not, i.e., the earnings attain the threshold at which it would be levied.
  • The 2nd tax timespan, within which the taxman must file and expect to be paid corporation tax for the 1st taxable period, will run from 1st June 2024 to 31st May 2025.
  • The due date for filing and paying corporate tax rate is 28th Feb 2025. During the returns submitting time, which runs from 1st June to Feb 28, 2025, the taxpayer may remit the tax at any moment.
  • Thus, we can see that the net time duration falls around 26 months as a whole in the given scenario. Thus, before ending this deadline the tax-liable person should approach the Federal Tax Authority (FTA) for corporate tax details.
  • Now, in the second case if the financial year of your business is starting from 1st Jan 2023 and finishing off on 31st Dec 2024; the general timeline for corporate tax in UAE will be as follows:   
  • After enrolling and compiling for corporate tax, the firm will determine whether or not it needs to compensate it following the initial tax period, which runs from January 1 to December 31 of 2024.
  • The payer will be required to remit and reimburse corporate income tax for the 1st tax duration from January 1 through 31 Dec of the 2nd taxable period.
  • September 30 is the due date for corporate tax filing and payment (2025). Whenever and wherever around this deadline, the taxes can be invoiced.
  • In this scenario, the cumulative timeframe that can be used for such a financial year is 33 months. Throughout this time, the taxable firm has the best time to register for itself.

Any corporation can comprehend its corporate tax timeline considering the aforementioned examples. If an enterprise is having trouble, it can obtain the advice of UAE corporate tax advisors. Corporate tax advisory services are really helpful in dealing with complex affairs of tax.

How to get ready for corporate taxes?

  • Review the Federal Tax Authority and Ministry of Finance web pages to familiarize yourself with the Corporate Tax Law and the assisting documents.
  • Ascertain whether and from what date your company will be liable for corporate tax using the details at your disposal.
  • Recognize the rules established forth by the Corporate Tax Law for your company, such as;
  • Regardless of whether and by while your company must sign up for corporate tax
  • What is your company’s financial reporting/tax duration;
  • what fiscal documents and data your company must maintain for corporate tax purposes;
  • Check the portals of the FTA and the MoF frequently for more material and guidelines on the Corporate Tax framework.
  • Check with tax experts in UAE to learn deeply about the new tax framework and how it will impact your business as a whole.

Choose Corporate Tax UAE

With the help of experts at Tax Consultant Dubai, you can get complete assistance on corporate tax matters. tax agents can help you understand your corporate tax timeline and different due dates for registering or filing for corporate tax in UAE.