UAE Corporate Tax Filing: Documents Needed and the Filing Process

The advent of corporate taxation has brought about a paradigm shift in the regulatory framework for businesses in the UAE. With the enforcement of Federal Decree-Law No. 47 of 2022, businesses are now required to register and file corporate tax returns. The Corporate tax filing UAE system is managed by the Federal Tax Authority (FTA), and it is applicable to financial years beginning on or after 1st June 2023. It is important to understand the necessary documents and the proper filing process to avoid any penalties.

The Corporate tax filing UAE system is applicable to most mainland businesses, free zone businesses, and foreign companies that have a permanent establishment in the UAE. Although free zone businesses that qualify are eligible for a 0% corporate tax rate on eligible income, they are still required to register and file corporate tax returns. The standard corporate tax rate is 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000. Even businesses that have minimal or no taxable income are required to register and, if applicable, file corporate tax returns within the stipulated time.

In the process of preparing for Corporate tax filing UAE, documentation is a very important aspect. A valid trade license and certificate of incorporation are needed to establish the legal status of the business. Financial statements, including the profit and loss statement and balance sheet, must be complete and prepared in accordance with widely accepted accounting principles, such as IFRS or IFRS for SMEs. In some instances, particularly for larger entities, audited financial statements may be required to ensure compliance.

Sound accounting records are also essential. Businesses must keep general ledgers, trial balances, invoices, and bank statements for the period in question. If the business is registered for VAT, the VAT returns and reconciliation statements submitted to the Federal Tax Authority should be consistent with the corporate tax computation. For businesses that have related-party transactions, transfer pricing documentation such as the master file, local file, and disclosure forms may also be required to ensure compliance.

The Corporate tax filing UAE process starts with the registration of the company on the EmaraTax portal, which is managed by the Federal Tax Authority. During the registration process, the company has to provide trade license information, identification documents of the owners or authorized signatories, and financial information. After the approval of the application, the company is allotted a Corporate Tax Registration Number, which is required for filing the tax return.

The second step in the process of taxable income calculation starts with the accounting profit, which is reflected in the financial statements. The calculation then proceeds with the adjustment of non-deductible expenses, exempt income, reliefs, and allowable losses carried forward from the previous accounting periods. It is important to note that accuracy is essential at this stage, as it may result in penalties or additional taxes.

After the taxable income is determined, companies are required to fill out and submit the corporate tax return via the EmaraTax system. The corporate tax return is typically required to be submitted within nine months from the end of the relevant financial year, and the tax payment is also required to be made within the same period. 

Late submission of registration or tax returns can lead to penalties and damage to reputation. Some common compliance challenges include late registration, misrepresentation of financial statements, and failure to consider transfer pricing. Thus, it is essential to have proper record-keeping and take professional advice whenever needed to avoid compliance challenges.

In summary, Corporate tax filing UAE is now a requirement for companies operating in the UAE. From having the right documentation to preparing the taxable income statement and submitting the tax returns on time, every aspect needs to be treated with caution. By being aware of the tax filing process and having proper financial documentation, companies can easily comply with the process and concentrate on expanding in the ever-changing UAE business environment.