In the evolving business landscape of the UAE, staying on top of your corporate tax responsibilities is key to success. One of the prime responsibilities includes filing corporate tax returns in a timely manner as well as compliant with the laws. However, it is not as simple as we say. In this blog, we break down the essentials of a tax return. Whether you are a seasoned business owner or just starting, we aim to provide you with practical insights into corporate tax returns in the UAE. However, we strongly recommend consulting a professional to remain compliant and avoid penalties. Let’s dive in and make sense of it together!
What is a Tax Return for a Business?
The UAE tax law defines tax return as:
“Information filed with the Authority for Corporate Tax purposes in the form and manner as prescribed by the Authority, including any schedule or attachment thereto, and any amendment thereof.”
A tax return is generally a form in which details of income, expenses, and other taxation details are provided. This in turn will calculate the final tax liability that is due to the UAE government. Any attachments, schedules, and amendments are also submitted along with the tax return. Furthermore, any relevant information or documentation requested by the Authority is also provided with corporate tax returns.
Corporate Tax Returns – Key Information for UAE Businesses
Subject to corporate tax registration, a business must file a tax return no later than 9 months from the end of the relevant tax period or any other date prescribed by the Authority. However, the tax return should be in the form and manner as per the guidelines of the tax authority.
Filing Corporate Tax Returns:
The tax return must include the following information:
a) The tax period to which the respective tax return relates.
b) The name, address, and Tax Registration Number(TRN) of the taxable entity.
c) The date of submission of the tax return.
d) The basis of accounting used by the entity for financial statements
e) The taxable income for the relevant tax period.
f) The amount of tax loss relief claimed under Article 37 of the tax law.
g) The amount of tax loss transfer under Article 38 of the tax law.
h) Any tax credits claimed under Articles 46 and 47 of the tax law.
i) The resultant corporate tax payable for the tax period.
Further Information on Tax Returns:
1. The taxable entity must provide the Authority with all the reasonably required information, documentation, and other records. This, in turn, will ensure the implementation of the relevant provisions of the tax law.
2. As an exception, the Authority may prescribe the form and manner of the tax return for a taxable person where the disclosure of information may pose a threat to national security or might be against the public interest.
3. The Authority may request the taxable person to submit a declaration under paragraphs (e), (f), (g), (h), and (i) of Clause 1 of Article 4—Exempt Persons of the Tax Law.
4. The authorized partner in an unincorporated partnership that has not received approval for an application under Clause 8 of Article 16 of the tax law to be treated as a taxable person may be asked by the Authority to submit a declaration on behalf of all the partners in the partnership.
5. The parent company is responsible for filing the tax return on behalf of the tax group.
Seek Professional Guidance
Nevertheless, the complexity of tax matters underscores the importance of seeking professional advice. Remember that consulting with a tax professional can provide the clarity necessary to navigate the evolving tax landscape effectively. Therefore, it is never a bad idea to consult a professional; instead, it is a wise decision to do so.
In this modern era of global business, ensuring compliance with corporate tax responsibilities is fundamental to securing financial success. Filing corporate tax returns is a primary obligation, but the intricacies involved make it a task of significance. Throughout this blog, we have dissected the essentials of a tax return, offering practical insights tailored for both seasoned business owners and newcomers alike. Furthermore, we are also encouraged to consult with a tax professional for better management of tax matters. As a business, your goal is to embark on the journey of financial responsibility, ensuring your business not only meets its obligations but thrives in the ever-changing economic setting of the UAE.
Creative Zone Tax & Accounting:
At Creative Zone Tax and Accounting, we redefine the narrative of financial management for businesses in the UAE. With a pledge to excellence in the local tax landscape, our expert team navigates the complexities of corporate tax returns. We ensure that your business not only complies with regulations but also thrives in the competitive market. Contact us today for any kind of business or tax assistance.