The first UAE Corporate Tax returns are now falling due. Businesses with a financial year from 1 June 2023 to 31 May 2024 must file by 28 February 2025. Those with a calendar-year 2024 tax period have until 30 September 2025. In each case, the return and any tax due must be submitted within nine months of the end of the tax period.
What the return asks for
The return is filed on the FTA’s EmaraTax portal. It starts with figures from your financial statements and then works through the adjustments needed to arrive at taxable income, including:
- exempt income, such as qualifying dividends;
- non-deductible expenses, such as part of entertainment costs and certain penalties;
- interest limitation, where net interest is significant;
- transactions with related parties and connected persons;
- reliefs and elections, such as Small Business Relief or Qualifying Free Zone Person status; and
- tax losses brought forward.
Points that often need attention
Revenue and Small Business Relief. If you plan to claim the relief, confirm your revenue is AED 3 million or less, measured properly, and make the election in the return.
Connected person payments. Salaries, rent and fees paid to owners and their families need to reflect market value to be deductible.
Free zone income. Qualifying Free Zone Persons need to separate qualifying and non-qualifying income and check the de minimis limits.
Transfer pricing disclosure. Many businesses need to complete a disclosure of related party and connected person transactions with the return.
Audited financial statements. Where required, these must be ready before the return is filed.
Give yourself time
The return itself is not long, but the work behind it is. Final accounts, adjustments, reliefs and supporting schedules all take time. Starting two or three months before the deadline is sensible, particularly for a first return.
If you would like us to prepare or review your first Corporate Tax return, please get in touch.
This article is general information based on the rules as we understand them at the date of publication. It is not advice on your circumstances. Laws and practice change, so please speak to us before acting on it.
