[ad_1]
Abu Dhabi: Businesses in the UAE will file tax returns and pay federal corporate tax (CT) to the Federal Tax Authority (FTA) within nine months of the end of the relevant tax period.
The new UAE CT regime imposes a standard corporate tax of 9% on corporate profits and 0% on taxable profits up to AED 375,000. CT will be effective for fiscal years beginning on or after June 1, 2023.
The CT regime is based on the principle of self-assessment, which means that businesses must ensure that the documents submitted to the FTA are correct and in compliance with the law.
The system’s payment and compliance deadlines allow taxpayers a generous time frame of up to 21 months from the start of their financial year to prepare to file and pay their taxes – a move in line with the UAE’s commitment to ensure that the implementation of the CT system goes as smoothly as possible .
The deadline means, for example, that businesses with financial years starting June 1, 2023 and ending May 31, 2024 will have from June 1, 2024 to February 28, 2025 to file their CT return and pay their CT payments.
For businesses whose first tax period begins on January 1, 2024 and ends on December 31, 2024, filings and payments need to be made between January 1 and September 30, 2025.
To further simplify the administrative process, UAE businesses are only required to file one CT return per tax period and any relevant supporting timesheets will need to be prepared and submitted to the Federal Tax Authority (FTA) for each tax period.
Completion of interim tax returns and prepaid CT payments are not required.
Furthermore, to support start-ups and small businesses, the UAE CT regime intends to provide relief in the form of simplified financial and tax reporting obligations.
The new tax regime also simplifies the CT compliance process for corporate groups. For example, a group of companies resident in the UAE can form a tax group and be treated as a single taxable entity if certain conditions are met. Benefits include efficient cost and time management, a single tax return for the group and the ability to consolidate group tax payments where some companies generate taxable profits and others have tax losses.
Businesses subject to CT need to register with the FTA and obtain a tax registration number. The CT registration process is expected to begin in early 2023.
For example, for a company whose first tax period begins on June 1, 2023, the registration will be within 26 months from January 1, 2023 to the final return filing date of February 28, 2025, while for the Businesses with a tax period commencing January 1, 2024 will have a 33-month window from January 1, 2023 to September 30, 2025.
The Ministry of Finance and the Federal Tax Authority will host a series of CT awareness sessions in the UAE to help businesses understand the new tax regime and fully prepare for its introduction.
Details of the meeting will be announced shortly.
[ad_2]
Source link