How to file Corporation tax in UAE

The United Arab Emirates (UAE) has rolled out a corporate tax, and we're excited to share the essential steps for getting started with tax registration and filing.Understanding the UAE Corporate Tax System: A Step-by-Step GuideStep

 1: Tax StructureThe corporate tax system in the UAE applies to businesses based on their income sourced within the UAE.The tax rate is 9% for taxable income that exceeds AED 375,000, while a 0% rate applies for income below this threshold.


Step 2: ScopeAll businesses based in the UAE, including those in free zones, are subject to corporate tax. Additionally, foreign companies with a permanent establishment in the UAE or those conducting business within the country are taxable as well.


Step 3: How to File Taxes

It's essential to keep accurate records of your accounting information, such as source documents.Calculate Taxable Income: Use your collected records to determine your business's taxable income.Identify Allowable Deductions and Exemptions: Make sure to claim any eligible deductions and exemptions to reduce your tax liability.


Know Filing Deadlines: Be sure to file your taxes within 9 months after your financial year-end.

File Online: Submit your tax return via the Federal Tax Authority's (FTA) e-Services platform.


Steps Involved in Filing Corporate Tax in UAESuccessfully filing corporate tax in the UAE involves multiple steps. Here's a straightforward guide to help you through the process:

  1. Register with the Federal Tax Authority (FTA):Obtain a Tax Registration Number (TRN) from the FTA using the EmaraTax portal. Don't forget to ensure your business has a valid trade license.
  2. Maintain Accurate Records:Keep organized financial records throughout the tax period, noting income, expenses, and other relevant transactions.
  3. Calculate Taxable Income:Work out your net profit or loss for the financial year and account for allowable expenses and adjustments.
  4. Complete the Tax Form:Fill out the corporate tax return form provided by the FTA with details on income, expenses, and any exemptions.
  5. Submit Online:Use the FTA's e-Services portal to submit your tax return and ensure timely payment of any due taxes.

How to File a Business Tax Return?


Here's a brief rundown on how to file a small business tax return in the UAE:

  1. Gather Your Financial Records: Collect all essential financial documents, including income statements, bank statements, receipts, and invoices. Ensure they're well-organized and reflect your business activities accurately.
  2. Determine Your Business Structure: Identify if your company is an LLC, corporation, partnership, or sole proprietorship, as this affects the tax form you need to file.
  3. Calculate Your Taxable Income: Sum up your total revenue from various sources such as sales, and subtract allowable business expenses to find your taxable income.
  4. Identify Deductions and Exemptions: Research tax deductions related to your business, such as costs of goods sold, operating expenses, depreciation, and any applicable tax credits that might lessen your tax burden.
  5. Register for Corporate Tax: If applicable, register for corporate tax by obtaining a Tax Registration Number (TRN) through the FTA's website.
  6. File Your Tax Return: Submit your corporate tax return electronically via the FTA site within 9 months after your tax period closes.
  7. Pay Taxes Due: Ensure that you pay any taxes by the filing deadline to avoid potential penalties. Follow FTA guidelines for payments.
  8. Keep Records for Future Reference: Hold onto copies of your tax return and supporting documents for at least 5 years, which is essential for future reference and in case of an audit.


Conclusion


Filing corporate tax in the UAE demands attention to detail and timely compliance. To ensure a hassle-free experience, plan ahead, stay organized, and seek expert advice when necessary, like consulting a tax expert such as Barakah AL Meezan. Keep yourself updated on UAE tax laws and regulations, verify your filings, and maintain open communication with the FTA. Regularly review your tax filing process and make necessary improvements.