Understanding the Different Parts of Tax Returns Under UAE Corporate Tax: A Complete Guide for Businesses

The introduction of corporate tax law in the UAE, businesses must now navigate a new corporate tax regime that requires detailed reporting. The UAE Corporate Tax Return serves as the primary document for filing the corporate tax, ensuring business in the uae remains compliant while optimizing tax outcomes. Understanding the various sections of the return form is essential for smooth tax compliance and avoiding penalties.

This step-by-step guide provides a comprehensive breakdown of the key parts of the ct return, helping businesses operating in the uae understand each section's purpose.

What Need to Know About the UAE Corporate Tax Return

The corporate tax return is the official document submitted to the Federal Tax Authority (FTA) via the EmaraTax portal. It provides crucial information on a company's taxable income and tax liability for a relevant tax period. Generally, the corporate tax returns must be filed and the corporate tax liability settled within nine months from the end of the first tax period.

The return consists of several critical sections:

1. Taxable Person Information

2. Elections Chosen by the Taxpayer

3. Accounting Schedule

4. Accounting Adjustments and Exempt Income

5. Reliefs Claimed

6. Other Adjustments

7. Tax Liability and Tax Credits

8. Review and Declaration

The Role of the Taxable Person in the Corporate Tax Return

The taxable person is the entity responsible for corporate tax return filing. This section identifies the business in the uae whose obligations are being reported. Key details include:

• Legal Name and TRN: The registered name and Tax Registration Number assigned during corporate tax registration.

• Type of Entity: Whether the taxpayer is a natural person, juridical person, or a qualifying free zone person.

• Financial Year-End: The date marking the end of the financial statements for the tax period, which determines the filing deadline.

Key Elections Available to Businesses for Corporate Tax

Elections allow a taxable person to choose specific treatments that can lead to significant tax savings. Some of the most important include:

• Small Business Relief: Available to businesses with revenue below a certain threshold to treat their taxable income as zero.

• Realisation Basis Election: Determines if tax adjustments for gains/losses are recognized only when realized.

• Transfers Within Qualifying Groups: Allows for the transfer of assets or a tax loss between members of a tax group without immediate tax impact.

Breaking Down the Accounting Schedule in Tax Return

The accounting schedule links the corporate tax return directly to your financial statements for the tax period.

• Income Statement & Balance Sheet: You must enter figures such as revenue, gross profit, and corporate income tax (accounting profit).

• Audit Details: If your revenue exceeds AED 50 million or if you are a qualifying free zone person, you must typically provide the auditor's name and opinion. Even for smaller businesses, corporate tax returns must be based on accurate financial records.

Accounting Adjustments & Exempt Income: Reconciling to Taxable Income

This section bridges the gap between accounting profit and taxable income.

• Exempt Income: Includes dividends from UAE companies or income from a qualifying free zone activity.

• Non-Deductible Expenses: Certain costs (like 50% of entertainment expenses or fines) are not deductible for corporate tax purposes and must be added back.

Fines and Penalties for not Filing UAE Corporate Tax Returns

Under UAE corporate tax law, every entity required to file a corporate tax return must submit their corporate tax returns by the legal deadline to avoid heavy penalties. Failure to file the tax return within the deadline for filing corporate tax—usually nine months after the period ends—results in a monthly fine of AED 500 for the first year, doubling to AED 1,000 thereafter.

Beyond filing, businesses subject to corporate tax must also pay their final tax on time; late payments incur a 14% annual interest charge under UAE tax regulations. To ensure compliance with UAE rules, businesses should use a corporate tax return guide and professional tax filing support to file a corporate tax return accurately. Utilizing expert services in the UAE ensures you file your corporate tax return within the stipulated timeframe, completing every mandatory part of the return to maintain perfect UAE CT standing.

Tax Reliefs You Can Apply for in Corporate Tax Return

Reliefs help reduce the taxable income of a business, lowering the amount of tax it has to pay. These are typically available to businesses that meet specific criteria, including:

• Business Restructuring Relief: Provides tax relief for businesses undergoing restructuring or reorganization.

• Small Business Relief: Offers reduced tax rates for qualifying small businesses.

• Qualifying Group Relief: Allows businesses within a corporate group to offset losses against taxable income.

By claiming these reliefs, businesses can reduce their taxable income, ultimately lowering their overall tax liability.

Who Needs to File Corporate Tax Returns?

Under UAE corporate tax law, almost all business entities operating in the country are required to submit their corporate tax returns. This mandatory obligation applies to mainland businesses, Free Zone entities (including Qualifying Free Zone Persons), and branches of foreign companies. Even if your business qualifies for a 0% tax rate—such as those with profits below AED 375,000 or those eligible for Small Business Relief—you are still legally required to file a corporate tax return for every tax period. Additionally, individuals or freelancers must perform tax return filing in UAE if their annual business turnover exceeds AED 1 million.

How Young & Right Can Help You with Different Parts of Tax Returns Under UAE Corporate Tax

Filing corporate tax returns can be a complex and time-consuming process, especially with the recent implementation of corporate tax in the UAE. At Young & Right, we simplify this process by guiding you through every step of your tax return filing in the UAE. Here’s how we can assist you:

1. Filing Corporate Tax Returns

Our team ensures that your corporate tax returns in the UAE are filed accurately and on time, adhering to the specific guidelines set by the UAE government. We handle all the required paperwork and ensure compliance with corporate tax filing regulations.

2. Accurate Calculation of Corporate Tax

Calculating your tax can be tricky, but with Young & Right, you’ll receive precise calculations based on the corporate tax rate and your financial standing. We make sure that your tax obligations are minimized while staying fully compliant with the law.

3. Completing the Tax Return Form

We take care of completing your tax return form, ensuring all necessary information is included and formatted according to the UAE tax authorities’ standards. From specific tax adjustments to reporting taxable income, we ensure accuracy in every section.

4. Understanding Corporate Tax Rates

Navigating the corporate tax rate under the UAE’s new tax laws can be confusing. Our team provides expert guidance on how the corporate tax rate applies to your business, so you can better plan and manage your finances.

5. Meeting Deadlines for Filing Corporate Tax

The deadline for filing corporate tax returns can vary, and missing it can result in penalties. With Young & Right, you don’t have to worry about missing important dates. We ensure your tax return submission is made on time, giving you peace of mind.

6. Comprehensive Tax Filing Services

From tax return filing in the UAE to ensuring you meet the compliance requirements, Young & Right offers end-to-end services to handle every part of your corporate tax filing. We ensure your taxes are filed accurately, with all necessary documentation, and in compliance with the latest regulations.

7. Implementation of Corporate Tax Strategy

We not only help you with corporate tax filing but also assist in creating and implementing an effective corporate tax strategy. This will help optimize your tax obligations and improve your financial planning for the future.

Conclusion

Understanding the corporate tax return filing process is a fundamental tax responsibility for any taxable person in the UAE. From the first tax filing onwards, accuracy in your tax position is vital to settle the corporate tax correctly and avoid late filing penalties.

Because the filing of tax returns involves complex tax calculations and tax adjustments, many businesses seek a corporate tax consultant or tax advisor for professional corporate tax support.