FTA Urges Timely Corporate Income Tax Compliance

The Federal Tax Authority (FTA) has issued an important reminder to businesses subject to Corporate Income Tax in the UAE. To avoid administrative penalties, businesses must file their tax returns and settle Corporate Income Tax dues within the legally mandated deadlines.

Here’s a breakdown of the FTA’s recent updates and key compliance requirements for businesses operating in the UAE.

Extended Deadline for Certain Tax Periods

In line with its commitment to facilitating voluntary tax compliance, the FTA issued Decision (7) of 2024 in September. This decision extends the filing and payment deadline to 31.12.2024 for companies that were established in the UAE on or after 01.06.2023 for tax periods ending on or before 29.02.2024.

Who Does This Apply To?

The extension benefits businesses that were established in the UAE on or after 01.06.2023 and whose tax periods concluded in:, December 2023: January 2024: February 2024

These businesses now have additional time to file their returns and settle their Corporate Income Tax liabilities without incurring penalties, provided they meet the new deadline.

Standard Deadlines for Corporate Income Tax Compliance

For tax periods not covered under the extended deadline, the FTA clarified that:, Businesses must file their Corporate Income Tax returns within nine months of the end of their respective tax period., Payments for Corporate Income Tax dues must also be made within this nine-month window.

For instance, a company whose tax period ends on 31.12.2024 would need to file its return and settle payable taxes by 30.09.2025.

Avoiding Non-Compliance Penalties

Failure to comply with the FTA’s deadlines for filing tax returns and settling payments can result in administrative penalties. Businesses are encouraged to act promptly to avoid these additional costs.

Key Tips for Compliance

1. Know Your Tax Period: Identify your tax period and the corresponding filing deadlines.
2. Maintain Accurate Records: Keep your financial accounting and documentation organized to streamline tax return preparation.
3. Engage Professional Support: Seek advice from tax consultants to ensure accurate filings and compliance.

What Should Businesses Do Now?

If Your Tax Period Ends Before 29.02.2024: Take advantage of the extended deadline and ensure your filings and payments are completed by 31.12.2024.

For All Other Tax Periods: Confirm your nine-month filing window and plan ahead to avoid last-minute issues.