Demystifying the Corporate Tax Return: What You Need to Know

What is Corporate Tax Return?

Corporate tax returns provide comprehensive information of an entity’s income, expenses, and other financial activities. Revenue earned by the entity reduced by the deductible expenses is essential for accurately determining the amount of tax the entity owes to the government. By thoroughly maintaining the books of accounts, businesses ensure compliance with tax regulations and avoid potential penalties.

 

A Corporate Tax Return is the information a company submits to the Federal Tax Authority to fulfill its tax obligations. Entity must follow the specific format and guidelines set by the Authority and can include additional schedules, attachments, and any necessary amendments.

 

Legality

According to Article 53 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses Taxable Person must file a Tax Return, as applicable, to the Authority in the form and manner prescribed by the Authority no later than (9) nine months from the end of the relevant Tax Period, or by such other date as directed by the Authority.

 

For example: A juridical person which has its financial year commencing on January 1^st and ending on December 31^st, the first corporate tax period will be 01 January 2024- 31 December 2024 and the deadline for the submission of CT return will be 30^th of September 2025.

 

What are the matters to be mentioned in Tax Return?

1. The Tax Period to which the Tax Return relates.
2. The name, address and Tax Registration Number of the Taxable Person.
3. The date of submission of the Tax Return.
4. The accounting basis used in the financial statements.
5. The Taxable Income for the Tax Period.
6. The amount of Tax Loss relief claimed under Clause 1 of Article 37 of this Decree Law.
7. The amount of Tax Loss transferred under Article 38 of this Decree-Law.
8. The available tax credits claimed under Articles 46 and 47 of this Decree-Law.
9. The Corporate Tax Payable for the Tax Period.

 

To ensure that the terms of this Decree-Law are implemented, a taxable person shall furnish the Authority with any information, documents, or records that the Authority may reasonably request.

 

In case the entity is registered with authority as a group, the parent company is obliged to file Tax return to the Authority on behalf of the Tax Group.

 

Proforma form and content of Corporate Tax Return

 

Disclaimer: Please note that the above proforma form has not been officially released by the Federal Tax Authority yet. We strongly recommend verifying all details directly with the authority. This content is intended solely for informational purposes.

 

What is the penalty for late submission of Corporate Tax Return?

Corporate tax penalties for late return submission can be very steep. For businesses with a fiscal year ending on December 31st, the tax return filing deadline is September 30th of the following year. Failure to comply with federal decree laws or submitting tax returns after the deadline can lead to significant fines.

 

Late submission of corporate tax return will result in a penalty of:

• AED 500 for each month of delay, or part thereof, for the first twelve months.
• AED 1,000 for each month of delay, or part thereof, from the thirteenth month onwards.

 

Why Spectrum Auditing?

Spectrum Auditing guides you with the laws and regulations of UAE, covering most compliances applicable as well as enable you deal with any queries pertaining to Risk Advisory, Economic Substance Regulations (ESR),  Corporate Tax (CT), Transfer Pricing (TP), Ultimate Beneficiary Owner (UBO), Anti Money Laundering (AML), etc., after reviewing your business.

 

As a pioneer in the field of auditing, accounting, taxation, and advisory services, we keep track of all the changes taking place in the UAE concerning laws, rules, and regulations. We keep our clients informed and regularly share the same information through our blog section or social media handles. Call us today for any kind of assistance at +971 4 2699329or email [email protected] to get all your queries addressed. Spectrum is your partner in your success.

 

With Spectrum Auditing’s expertise and tailored solutions, we empower businesses to navigate the complexities of corporate taxation, enabling them to thrive in the UAE’s dynamic business environment.

 

Disclaimer: This material and the information contained herein, prepared by SPECTRUM AUDITING, are intended for clients and professionals to provide updates and are not an exhaustive treatment of the subject. We are not, by means of this material, rendering any professional advice or services. It should not be solely relied upon as the basis for any decision which may affect you or your business. This update provides certain general information as well as specific information regarding SPECTRUM AUDITING. This update should not be regarded as comprehensive or sufficient for the purposes of any decision-making.