As the UAE’s tax landscape continues to evolve, in September 2024, the Federal Tax Authority (FTA) introduced Decision No. 7 of 2024, providing critical updates for businesses regarding Corporate Tax Returns. This decision grants an important extension for companies incorporated, established, or recognized on or after 1st June 2023, allowing them to file their Corporate Tax Returns and settle their Corporate Tax Payable by 31st December 2024, provided their tax period ends on or before 29th February.
While this extension may offer some breathing room, it serves as a timely reminder for businesses to prioritize their corporate tax preparation and follow the necessary steps for corporate tax filing. It’s an opportune moment to review compliance measures, align with the latest regulations, and safeguard against the financial repercussions of late filings. Preparing your corporate tax return is not just about meeting deadlines; it’s about ensuring that your business is well-positioned for success in a dynamic economic environment.
Key Steps for Corporate Tax Filing Preparation
- Tax Registration:
All companies must obtain a tax registration number from the FTA. To do this, provide the necessary documents and details as required by the authority.
- Record Keeping:
Maintaining accurate records of all financial transactions and relevant tax documents is essential for compliance with UAE tax regulations. Effective record-keeping will simplify the tax return preparation process.
- Preparation of Tax Return:
Calculate your taxable income based on the maintained records, taking into account any applicable tax deductions and exemptions under UAE tax laws. Ensure that all calculations are thorough and accurate to avoid discrepancies.
- Filing of Tax Return:
Submit the completed tax return to the FTA through their E-Services platform. As one of the key steps for corporate tax filing, it’s vital to ensure that the submission is made on or before the stipulated timeline to avoid penalties.
- Payment of Tax:
Fulfill your tax liability as determined by the filed tax return. Make the payment before the due date to remain compliant with tax regulations.
- Tax Audit:
Be prepared for a potential tax audit. If the FTA selects your return for audit, you may need to provide additional information or documentation to verify the details submitted in your tax return.
Not adhering to Crucial Steps for Corporate Tax Filing? Here’s the Penalties for Non-Compliance
Failure to meet the Corporate Tax filing deadline can result in serious financial repercussions for your business. It’s crucial to understand the penalties that come with non-compliance and follow the necessary steps for corporate tax filing:
- Non-Filing Penalty: Companies that do not submit their tax returns by the deadline will face a penalty of AED 500 for each month during the first year. After the initial 12 months, this penalty increases to AED 1,000 per month. Over time, these cumulative penalties can create a significant financial burden.
- Failure to Settle Payable Tax: In addition to penalties for late filing, any unpaid tax amounts will incur a 14% annual penalty, calculated on a monthly basis. This penalty applies to the total outstanding tax due after the deadline, exacerbating the financial consequences for businesses that do not comply.
To avoid these repercussions, it is essential to follow all compliance requirements, file tax returns on time, and settle any payable tax promptly. Taking these steps for corporate tax filing will help ensure that your business remains in good standing with the UAE tax authorities and avoids unnecessary financial penalties.
How MS can assist you in easing your steps for Corporate Tax filing
At MS, we provide comprehensive support for corporate tax filing, helping businesses fulfill their tax obligations efficiently and accurately. Our process includes assistance in steps for corporate tax filing. Our expert team meticulously calculates tax liabilities and manages the entire filing process to ensure compliance with UAE regulations. We stay informed about any changes in tax legislation and offer strategic tax planning to help clients minimize their liabilities. Additionally, we oversee filing deadlines, provide timely reminders, and offer post-filing support to address any penalties or disputes that may arise.