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Post By: admin May 30 2023

Determination of the corporate tax period and its deadline for submission

Knowledge of taxation is essential for running any business. Businesses operating in the UAE are required to have working knowledge of the system of taxation there, which includes the newly introduced corporate tax. In this article, we will delve into the details of corporate tax, its tax period, and the deadline for submission.

In an attempt to comply with international standards, the UAE government has introduced a new corporate tax structure. UAE is known for its oil-based economy, and the country aims to shift this narrative through the adoption of such a tax structure. The government has been investing in innovation and technology to diversify its sources of revenue. Further, the government has been making tax reforms to attract more businesses. The shift started with the introduction of VAT in 2018. With the introduction of corporate tax, this process has been taken a step further. The Ministry of Finance made the announcement regarding the introduction of corporate tax on January 31, 2022. The implementation of such a tax is expected to begin with the start of the new financial year in June 2023.

You can also read: Financial Records Required for Corporate Tax Registration and Filing Returns

Determination of the Corporate Tax Period

The taxable period of a taxable person is defined as the financial year or part thereof for which a tax return is to be filed.

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

A taxable person can make an application to the authority requesting a change in his tax period, which includes a change in the start or end date or a different tax period. This change is subject to the conditions set by the authority.

Deadline for submission

According to Article 51 of this Decree, a taxable person is required to file his tax returns with the authorities in the manner prescribed by them. Such a return needs to be filed no later than nine months from the end of the relevant tax period or on such a date as directed by the authority.

The functioning of this system can be understood with the help of the following illustrations;

If the financial year ends on May 31st:

The Corporate Tax Law will be applicable from June 1, 2023; hence, the first tax period will be June 20, 2023, to May 31, 2024. The return filling due date for the same will be February 28, 2025. 

You can also read: What is Transfer Pricing and its Methodologies and for Whom it is Applicable under CT?

If the financial year ends on December 31st:

The Corporate Tax Law will be applicable from June 1, 2023, but will be applicable to such a firm from the next financial year, i.e., January 1, 2024. The first tax period will be from January 1, 2024, to December 31, 2025. The return filing due date will be September 30, 2026. 

The businesses having an accounting period from June 1st to May 31st will have a period of 26 months for registration. And a business having an accounting period from January 1st to December 31st will have a period of 33 months for registration.

The tax return thereby filed should include the following information:

  • The name, address, and tax registration number of the taxable person
  • The date on which the tax submission is made.
  • The basis of accounting that is used in the financial statements
  • The tax period to which the tax return is applicable
  • The taxable income for the mentioned tax period.
  • The amount of tax loss relief claimed by the taxable person
  • The amount of tax loss that is transferred
  • The tax credits that are available
  • The final corporate tax payable at the end

If the authority requires any information, documents, or records, for the implementation of the provisions of the decree law, the taxable person is required to comply with the authorities and provide the required documents.

If the disclosure of information concerns national security or is contrary to the public interest, as an exception to this law, the minister may prescribe the form in which the tax return needs to be filed with the authority of the taxable person. 

To conclude, as a business operating in the UAE, it is of utmost importance to be aware of the corporate tax law and its nuances. The companies must be aware of the tax period and the deadline for submission so that they can comply with the rules and regulations and file their tax returns on time to avoid penalties. An in-depth understanding of the above-mentioned topics can help ensure the smooth functioning of a business.

How can CDA help you with Corporate Tax submission?

CDA is an expert in corporate tax submission and can assist you in meeting your tax obligations efficiently. We will ensure that your financial records are accurately maintained and that all tax forms are completed correctly and submitted on time. Our team of experienced accountants will work closely with you to understand your business and identify all applicable tax deductions and credits to minimize your tax liability. We also provide guidance on tax planning strategies to help you make informed financial decisions and achieve your long-term goals. Let CDA take the stress out of corporate tax submission and help you stay compliant with the tax laws. 

Contact us for more information on corporate tax submission!!