Corporate Tax Filing Deadline Extension for Businesses in UAE 2025 Explained
20/11/2025
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In 2025, maintaining proper corporate tax records in the UAE has become more critical than ever. With the UAE’s tax system constantly evolving and the introduction of federal tax laws such as the Corporate Tax Law (Decree-Law No. 47 of 2022), UAE businesses must ensure compliance with UAE rigorous tax record-keeping standards. The Federal Tax Authority (FTA) plays a vital role in overseeing the implementation of tax regulations, and failing to meet these requirements can lead to severe penalties.
This comprehensive guide provides businesses with the knowledge they need to maintain accurate financial records and compliant corporate tax records. We will explore the key aspects of UAE corporate tax record keeping, outline best practices, and explain how Young & Right can assist you in achieving and maintaining corporate tax compliance.
In 2023, the UAE introduced a corporate tax regime under Federal Decree-Law No. 47. Prior to this, the UAE was considered a tax haven for businesses due to the absence of corporate income tax. However, this changed to align the UAE with global tax standards and ensure long-term sustainability and transparency, forming a modern tax framework.
The corporate tax in the UAE applies to most businesses with a taxable income above AED 375,000. The standard corporate tax rate is 9% on profits above this threshold, while a 0% rate applies below it. This marks a significant shift in the country’s tax policies, affecting all sectors.
As part of these changes, tax record keeping has become an integral part of corporate tax compliance. Businesses must now maintain detailed financial records that can be accessed in the event of a tax audit by the FTA. This ensures the correct tax calculations are made and the corporate tax return is accurate.
The Federal Tax Authority (FTA) is the primary regulatory body that oversees the implementation of tax procedures and tax laws in the UAE. The FTA ensures that businesses comply with all tax obligations, including the maintenance of financial records, corporate tax filing, and audits.
The FTA has strict rules on record keeping and has the authority to conduct audits to ensure compliance. Failure of a taxable person to maintain proper tax records can result in hefty fines, penalties, or even business shutdowns in extreme cases, especially with the latest amendments to the administrative penalty framework.
The UAE tax system mandates that businesses, including exempt from corporate tax and subject to corporate tax entities, maintain accurate and comprehensive records related to their income, expenses, taxes paid, and corporate tax returns.
Record Retention Period: 7 Years
Businesses must keep their records and supporting documents for a minimum of 7 years from the end of the relevant tax period to which they relate. This is a critical requirement for every taxable person and even exempt from corporate tax entities must comply.
Businesses must maintain detailed records that support their tax liabilities and tax calculations.
Types of Records to Maintain
Financial Records: Businesses are required to keep financial statements such as income statements, balance sheets, cash flow statements, and profit-and-loss statements, all aligning with IFRS standards. These are crucial for determining taxable income and filing the corporate tax return.
• VAT Records: VAT-registered businesses must keep records of VAT invoices, receipts, and VAT returns for a minimum of 5 years.
• Transfer Pricing Documentation: Multinational businesses with cross-border transactions must maintain detailed transfer pricing documentation. This proves that intercompany transactions are conducted at the arm's length principle, in compliance with corporate tax regulations.
• Employee and Payroll Records: Records related to employees’ compensation, including salaries and other benefits, are necessary for compliance with wage protection systems and employment tax purposes.
• Other Tax Documents: All contracts, bank statements, asset details, inventory records, and any documents necessary to support the information in the corporate tax return must be retained.
To ensure compliant with UAE corporate tax record-keeping standards, many businesses use Enterprise Resource Planning (ERP) systems or accounting software. ERP systems help automate financial record keeping, minimize human errors, and store tax data in a centralized platform, which is key for digital tax compliance.
Some of the most popular ERP solutions include: SAP, Oracle, Microsoft Dynamics, and QuickBooks. Implementing an ERP system can significantly reduce the risk of non-compliance and provide businesses with real-time insights into their financial health.
Adopting robust practices is essential for seamless corporate tax compliance.
Establish a Consistent Record-Keeping Process
A consistent bookkeeping in UAE process is key to ensuring that all tax records are accurate and up-to-date. This involves setting up proper systems to:
• Regularly update financial records.
• Categorize tax-related documents correctly (invoices, receipts, contracts).
• Establish an audit trail to track all changes made to records.
• Familiarize yourself with the latest FTA requirements and align your practices accordingly. This includes:
• Keeping records that meet the FTA’s requirements for format and content.
• Regularly reviewing tax records to ensure they are complete and accurate.
• Conducting periodic internal audits to ensure compliance with tax laws.
ernal audits to ensure that records are in compliance with tax laws.
The security of tax records is an important aspect of compliance. Businesses must store tax records securely to prevent unauthorized access or data breaches, often utilizing secure cloud solutions or encrypted digital formats for electronic records.
• Failure to Maintain Complete and Accurate Records: Incomplete records can lead to fines for an incorrect tax return. Employing professional accountants and tax advisors can help ensure all income, expenses, and taxes are thoroughly documented.
• Not Updating Records Regularly: Records must be updated to reflect current financial activity, especially at the end of each tax period. Schedule regular updates or use automated systems to update records in real time.
• Inadequate Documentation for VAT and Transfer Pricing: Maintain detailed records for all VAT transactions and all documentation related to transfer pricing for cross-border and related party transactions.
Tax records must be updated regularly to reflect current financial activity. Failing to do so can result in outdated information being submitted during tax filings. To ensure accuracy:
• Schedule regular updates to tax records (monthly or quarterly).
• Use automated systems to update records in real time.
Another common issue is the lack of proper documentation for VAT and transfer pricing. Inaccurate or incomplete VAT records can lead to non-compliance. To avoid this:
• Maintain detailed records for all VAT transactions, including VAT invoices and receipts.
• Keep all documentation related to transfer pricing for cross-border transactions.
The Future of Corporate Tax Record Keeping in the UAE
As the UAE continues to adapt to global tax standards, businesses must stay ahead of regulatory changes.
• Upcoming Changes to Corporate Tax Law: The UAE is preparing for the potential implementation of the Domestic Minimum Top-Up Tax (DMTT), affecting large multinational enterprises (MNEs) with global revenues exceeding EUR 750 million, and is intensifying efforts towards digital tax compliance including a forthcoming e-invoicing mandate.
• The Role of Artificial Intelligence in Tax Record Keeping: AI will play a significant role in automating the categorization and reconciliation of tax records, further improving efficiency and minimizing human error.
• Preparing for Digital Tax Compliance: Businesses must prepare for the future of digital tax compliance, which will involve filing taxes digitally via the EmaraTax portal and maintaining electronic records in secure, cloud-based systems.
Since the UAE introduced corporate tax under a Federal Decree Law, maintaining meticulous financial records is the bedrock of tax compliance in the UAE. Proper record keeping is essential for accurately calculating corporate tax liability, ensuring the correct corporate tax payment, and demonstrating that your business has met the requirements for the standard rate or the minimum tax threshold. Seeking professional tax advice from a qualified tax agent can help businesses, including those operating under a zone tax framework, in effectively managing tax obligations, leading to greater tax efficiency and significantly mitigating the risk of penalties during an FTA audit.
Navigating the complexities of UAE corporate tax compliance can be daunting for businesses, especially with the introduction of the UAE corporate tax regime. At Young & Right, we offer comprehensive tax compliance services to ensure that your business stays on track with the UAE taxation framework. Our team of tax professionals is here to guide you through every step of tax procedures law, making sure you are fully prepared for all tax assessments and obligations.
Our expertise includes helping you register for corporate tax with the UAE Ministry of Finance, ensuring that you obtain a tax registration number and are compliant with the latest UAE corporate tax regulations. We understand that maintaining accurate records and documents is essential for proper tax reporting, so we assist with filing corporate tax returns, calculating corporate tax, and ensuring that all your tax payable amounts are calculated efficiently.
At the end of the tax period, it is crucial to file your first corporate tax return and manage corporate tax liability. Our tax consultants work closely with you to ensure that your corporate tax framework aligns with the implementation of corporate tax law. We also help with the filing corporate tax to minimize any risks during tax year transitions, ensuring you meet all deadlines.
Maintaining accurate financial records is an essential part of running a compliant and successful business in the UAE. With the introduction of federal corporate tax laws and the active role of the FTA, businesses must ensure they have the right systems in place to manage their tax records efficiently, fulfill their corporate tax obligations, and meet the minimum 7-year retention period for records. This is especially vital for businesses seeking a Tax Registration Number (TRN) and proper management of foreign tax credits.
Partner with Young & Right to navigate corporate tax record-keeping and stay ahead of regulatory requirements.
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