Businesses in the UAE have 40 days left to submit their corporate tax returns for the period ending December 31, 2024. The September 30, 2025 deadline is fast approaching, and businesses should begin preparations now to avoid a last-minute rush. The Federal Tax Authority (FTA) encourages early submission to simplify the process and avoid penalties.
Are Corporate Tax Returns Required if There Was No Business Activity or Profits?
Yes, every company registered for corporate tax must submit a return by the due date, even if no business transactions or profits occurred. The non-taxability of income up to Dh375,000 does not exempt companies from filing tax returns, regardless of profit or revenue.
Small Business Relief (SBR) Eligibility
Small Business Relief (SBR) can be claimed if a company’s annual revenue is under Dh3 million. This allows businesses to avoid corporate tax payments, even if they generate significant profits. For example, a company with a net profit of Dh2 million on annual revenue of Dh2.75 million can still claim SBR.
SBR also simplifies the filing process, reducing the tax return form from eight sections to just two. However, businesses should carefully review eligibility requirements and assess future tax strategies before applying for SBR.
Do I Need Audited Financial Statements?
Audited financial statements are only required if the business revenue exceeds Dh50 million or if the company seeks to access the 0% preferential tax rate. In all other cases, financial statements must be attached with the corporate tax return, except under SBR.
Transfer Pricing Report Submission
A Transfer Pricing Disclosure Form (TPDF) is not required unless the company exceeds specific financial thresholds. The form must accompany the corporate tax return and includes details on transactions with related parties, along with the methods used to determine the arm’s length value of those transactions.
Other Key Considerations for Tax Return Preparation
The corporate tax return is an online form with eight sections, requiring detailed information. Businesses must assess their tax elections and claims for reliefs. Some elections are irrevocable, making it important to carefully evaluate current and future tax positions. It’s also essential to segregate taxable income and exempt income.
Penalties for Non-Compliance
Failure to submit the corporate tax return by September 30 results in a Dh500 monthly penalty. After 12 months of delay, the penalty increases to Dh1,000 per month. Additionally, a 14% annual penalty applies for the failure to settle the tax liability.
Given the importance of meeting the UAE corporate tax deadline, businesses must ensure timely submission, carefully review their financial statements, and strategically plan their tax positions.
