Tax Return in UAE: Key Requirements, Deadlines, and Best Practices

The introduction of corporate tax in the UAE has brought new compliance obligations for businesses. Filing a tax return is a crucial responsibility to ensure adherence to the Federal Tax Authority (FTA) regulations and avoid penalties. This article provides an overview of key requirements, deadlines, and best practices for filing a tax return in UAE effectively.

Overview of a Tax Return in UAE

Businesses in the UAE subject to Corporate Tax must file a tax return in UAE and pay any tax due to the Federal Tax Authority (FTA) within nine months after the end of their tax period. This process follows a self-assessment system, meaning businesses are responsible for calculating and reporting their taxable income accurately. Timely submission ensures compliance, prevents penalties, and confirms that the correct tax amount is paid.

The tax return in UAE must be filed online through the EmaraTax portal, following the format prescribed by the FTA. Depending on the business’s circumstances, additional schedules or supporting documents may be required.

A tax return can be submitted by the business itself or by an authorized party, such as a Tax Agent or Legal Representative. Businesses operating as a Tax Group must have the Parent Company file on behalf of the entire group.

Key Requirements for Filing a Tax Return in UAE

Businesses subject to corporate tax must fulfil specific requirements when preparing and filing their tax returns. These include:

1- Tax Registration

Businesses and individuals in the UAE who fall under Corporate Tax regulations are classified as Taxable Persons. Broadly, Corporate Tax applies to:

• UAE-based companies and foreign companies effectively managed and controlled from the UAE.
• Foreign businesses with a branch in the UAE (Permanent Establishment).
• Businesses earning income from UAE sources without a physical presence.
• Foreign companies generating income from UAE real estate.
• Individuals running a business in the UAE, if their annual turnover exceeds AED 1 million.

How and When to Register?

All Taxable Persons must register with the FTA and obtain a Tax Registration Number (TRN) for Corporate Tax. WellTax assists businesses with seamless registration, ensuring compliance with FTA regulations.

2- Financial Statements

The Corporate Tax Law requires each taxpayer to determine taxable income based on standalone financial statements prepared in accordance with UAE-accepted accounting standards, which are International Financial Reporting Standard (IFRS) and IFRS for SMEs.

Wondering which accounting standard to use?

WellTax provides expert accounting services, helping businesses ensure their financial statements comply with UAE standards and avoid penalties.

3- Taxable Income Calculation

The taxable income declared in your tax return must be computed based on accounting profits, with adjustments for allowable deductions and exempt income.

Curious about which expenses you can deduct?

We’ve covered that in a previous article—check it out here for a comprehensive list of deductible expenses! On the flip side, not all expenses are deductible. If you’re unsure about the non-deductible ones, you can find the details in our guide here.

4- Supporting Documents

Businesses must maintain records of their revenues, expenses, contracts, and other documents to support their tax return in UAE and allow the FTA to verify taxable income. For more details on the types of documents to keep, check out our previous article on supporting records. Keep in mind that failure to maintain these records could result in penalties, including AED 10,000 for each violation or AED 20,000 for repeated violations.

5- Transfer Pricing Compliance

If your business engages in transactions with related parties, it’s crucial to follow transfer pricing rules and maintain proper documentation.

There are four key documents you’ll need to consider:

• Transfer Pricing Disclosure Form: This form details the related party transactions that occurred during the tax period. Taxable Persons must complete it annually if the total value of transactions exceeds the threshold set out by the FTA.
• Master File: This provides a comprehensive overview of your MNE group’s global operations and transfer pricing strategies.
• Local File: This includes detailed information on transactions specific to the local entity.
• Country-by-Country Reporting (CbCR): This document breaks down your MNE group’s revenue, profits, and taxes by jurisdiction, offering a global perspective.

WellTax helps businesses navigate transfer pricing compliance, ensuring all documentation meets regulatory requirements.

Deadlines for Corporate Tax Return Filing

The FTA has established strict deadlines for filing corporate tax return in UAE, which businesses must adhere to:

• Annual Filing Deadline – Tax returns must generally be filed within 9 months from the end of the relevant financial year. For example, if a company follows a calendar year (January to December), the deadline for filing the tax return in UAE would be September 30 of the following year.
• Payment of Corporate Tax – The tax liability must be settled by the filing deadline to avoid late payment penalties.
• Amendments and Corrections – If an error is identified after submission of the tax return, businesses may be required to file a voluntary disclosure within 20 business days from the date when the Taxable Person became aware of the error.

Here’s a quick rundown of potential fines and penalties tied to Corporate Tax compliance. While this list covers some key points, it’s not exhaustive. For a deeper dive into all administrative penalties, feel free to contacts us.
 

Description of Violation	Administrative Penalty Amount in AED
Failure to file the Tax Return on time.	AED 500 per month for the first 12 months; AED 1,000 per month thereafter.
Failure to pay the due tax.	14% per year on the unpaid tax, applied monthly.
Submitting an incorrect Tax Return.	AED 500 (unless corrected before the deadline).

Best Practices for Ensuring Compliance

To help you stay on top of UAE corporate tax regulations and avoid penalties, here are some key practices businesses should follow when preparing to file a tax return in UAE:

1. Maintain Accurate Records – Keeping your financial records and invoices organized will make filing a tax return in UAE much easier and reduce the risk of errors.
2. Seek Professional Advice – Navigating tax regulations can be tricky. Partnering with an FTA-registered tax agent can provide peace of mind and help you avoid costly mistakes.
   At WellTax, we’re proud to be an FTA-registered tax agent, offering expert guidance to ensure your compliance is seamless. In our previous article, we dived into why having a tax agent in the UAE is a game changer. Check it out here.
3. Monitor Tax Obligations – Corporate tax laws change from time to time, so it’s important to stay updated and make sure you’re complying on time.
4. Utilize Accounting Software – Using the right accounting tools can save time and ensure accuracy in your tax calculations and reporting.
5. Prepare for Audits – The FTA may conduct audits, so make sure your records are easily accessible and up to date to avoid any surprises.

By following these best practices, you can keep things running smoothly and stay compliant with the ever-evolving tax landscape in the UAE.

Conclusion

Filing a tax return in UAE is more than just a compliance requirement—it’s a crucial step in maintaining your business’s financial health and avoiding costly penalties. Staying informed about tax regulations, adhering to deadlines, and implementing best practices can ensure a smooth tax filing experience.
Navigating corporate tax obligations can be complex, but you don’t have to do it alone. WellTax is here to help businesses with expert guidance, ensuring full compliance with UAE tax laws. Whether you need assistance with tax registration, financial statements, or filing your tax return in UAE, our team is ready to support you.