Dubai: Companies in the UAE are still in the process of registering for corporate tax or have already done so – but for one bunch of businesses, it’s already time to file their tax returns.
That’s right, for companies incorporated in June 2023, September 30, 2024 is when the tax filing is scheduled. In other words, a full 12 months before the majority of companies in the UAE get around to filing their tax returns for the financial year 2024.
This is how it works: For instance, if the company was incorporated on June 7, 2023 and with a financial year from January 1 to December 31, the first financial year of the company will be from June 7, 2023 to December 31, 2023. That is for a period of 6 months and 24 days.
“The first financial statements for this company will be prepared for the same period, as per the Commercial Companies Law,” said Sumayya Zain, Managing Partner at Hallmark International Auditing of Accounts.
“Under the corporate tax law, its first tax period will be the same as the first financial year, which is from June 7, 2023 to December 31, 2023, and the tax return must be filed by September 30, 2024.”
Tax return is open for UAE companies incorporated in June 2023. This requirement aligns with the implemented corporate tax regulations and public clarifications from the Federal Tax Authority (FTA
Obviously, it will be new businesses and corporate entities licensed in June of 2023 that will need to meet the end September deadline.
They will need to keep these details in mind:
- For late submission, there is a Dh500 fine for each month for the first 12 months after the due date, and Dh1,000 for each month thereafter.
- Failure to settle tax: A monthly penalty of 14% per annum on the unpaid tax amount, accruing from the day after the payment due date.
“The tax return is open for companies incorporated in June 2023,” said Sumayya. “This requirement aligns with the implemented corporate tax regulations and public clarifications from the Federal Tax Authority (FTA).”
When does corporate tax filings start for others?
The majority of companies operating in the UAE and with the calendar year – January to December – being the financial year need to file their first corporate tax returns from September 2025.
Now, if a business was incorporated on May 01, 2023, its first tax period will be January 1, 2024 to December 31, 2024 if it follows the calendar year.
“If the date of incorporation was July 1, 2023, and financial year is the same as calendar year, then the first tax period will be July 01, 2023 to December 31, 2024,” said Atik Munshi, Managing Partner at Finexpertiza UAE. And you have a last date for filing the first tax return of September 30, 2025.
“It’s only if the date of incorporation was June 2023, and financial year is same as calendar year, then the first tax period will be June 01, 2023 to December 31, 2023. That being the case, the last date for filing first corporate tax return will be September 30, 2024.”
Filing tax returns
The filing of corporate tax returns is through the Emaratax portal. Audited financial statements are mandatory for those with revenues exceeding Dh50 million and for qualifying free zone persons.
In a scenario where an entity is planning to liquidate or deregister in 2024, the corporate tax registration will still be mandatory. This rule applies even to expired/dormant licenses
“There is a clear distinction between corporate tax registration date and tax period for which the entity will ultimately file its tax return,” said Munshi.
“It is challenging when the company is incorporated just before or after the effective date of UAE corporate tax and follows the calendar year as financial year. The entity’s first financial and tax period cannot be extended beyond 18 months - and it cannot be shortened to be less than 6 months.
“That’s why those businesses with a June 2023 license has to file their tax returns by end of September.”
