Administration of Corporate Tax- Under UAE Corporate Tax Law Consultation Document

𝐀𝐃𝐌𝐈𝐍𝐈𝐒𝐓𝐑𝐀𝐓𝐈𝐎𝐍 𝐎𝐅 𝐂𝐎𝐑𝐏𝐎𝐑𝐀𝐓𝐄 𝐓𝐀𝐗 |  𝐔𝐀𝐄  𝐂𝐎𝐑𝐏𝐎𝐑𝐀𝐓𝐄 𝐓𝐀𝐗 𝐋𝐀𝐖 |  𝐂𝐎𝐍𝐒𝐔𝐋𝐓𝐀𝐓𝐈𝐎𝐍 𝐃𝐎𝐂𝐔𝐌𝐄𝐍𝐓

On 31 January 2022, the UAE Ministry of Finance announced the introduction of Federal Corporate Tax (CT) in UAE w.e.f. 1 June 2023. While the UAE Federal Tax Authority (FTA) is finalizing the UAE CT regime, on 28 April 2022, it issued a public consultation document covering various aspects of the proposed law. The business community and other interested stakeholders are expected to provide their comments online at the prescribed link by 19 May 2022.

The document does not represent the final legislation and cannot be relied upon to make individual or commercial decisions.

Registration:

• A business subject to CT will need to register with the Federal Tax Authority (FTA) and obtain a Tax Registration Number within a prescribed period. FTA will have the power to automatically register a business for CT if the person does not voluntarily do so.
• Where business is ceased to be subject to the CT (due to cessation or liquidation), it will need to apply for deregistration for FTA for CT purposes within three months from the date of cessation. Again, The FTA will have the power to deregister any person based on available information.

Filing and payment:

• A business will only need to prepare and file one tax return and other related supporting schedules with the FTA for each tax period. There will be no requirement for a business to file a provisional CT return and make advance payments of CT.
• Each tax return and related supporting schedules will need to be submitted to the FTA within nine months of the end of the relevant Tax Period.
• Payments to settle a taxpayer’s CT liability for a Tax Period will need to be made within nine months of the end of the relevant Tax Period.

Assessment:

UAE CT regime will be based on self-assessment principles. However, the FTA may review a CT return and issue an assessment within the timeframe prescribed in tax procedures law. A taxpayer may challenge an amended assessment issued by FTA by processes and procedures prescribed in the law.

Document requirements:

• A business will be required to maintain financial and other records that explain the information contained within the CT return and other documents submitted to the FTA.

(Audited financial statements depending on the requirement of applicable regulations/  Records to support exempt tax status)

• The UAE CT regime will require a Free Zone Person to have audited financial statements if it wants to benefit from the 0% CT regime.

Transitional rules:

There is no requirement for UAE business to restate their balance sheet upon entering the UAE CT regime.