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Here’s a detailed breakdown of the UAE Corporate Tax filing requirement, including who must file, timelines, exemptions, steps to comply, and consequences of non-compliance:

🏛️ Background: Introduction of UAE Corporate Tax

The UAE introduced Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which came into effect on 1 June 2023. This marks a major shift, transitioning the UAE from a no-corporate-tax jurisdiction to one with a formalized corporate tax regime.

âś… Who Must File Corporate Tax in the UAE?

  1. UAE-Resident Businesses:
    • Mainland companies
    • Free zone companies (even if claiming 0% under “Qualifying Free Zone Person” status — still must file)
    • Branch offices of foreign companies
    • Partnerships and sole establishments engaged in business activities under a license
  2. Foreign Companies:
    • If they have a Permanent Establishment (PE) in the UAE
  3. Natural Persons / Individuals:
    • If they earn more than AED 1 million annually through a licensed business or commercial activity, they are subject to corporate tax and must file.

❌ Who May Be Exempt (But Still Must Register):

Even if a business is exempt from paying tax, they must still register and submit a return unless explicitly excluded.

Common exempt entities:

  • Government entities
  • Wholly government-owned companies
  • Qualifying Public Benefit Entities (charities, etc.)
  • Qualifying Investment Funds
  • Pension and social security funds
  • Qualifying Free Zone Persons (still must file at 0%)

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đź’¸ Tax Rate Structure:

  • 0% on taxable income up to AED 375,000
  • 9% on income above AED 375,000
  • 15% (or higher) for multinationals under OECD Pillar Two (typically with global revenue above EUR 750 million)

đź“… Deadlines for Filing Corporate Tax

Financial Year EndFiling Deadline
31 December 202430 September 2025
31 March 202531 December 2025
30 June 202531 March 2026
31 December 202530 September 2026
  • Returns are due within 9 months from the end of the relevant financial year.
  • Payment of any tax due must also be made by the same deadline.

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đź§ľ How to File: Step-by-Step

  1. Register for Corporate Tax:
  2. Prepare Financial Records:
    • Maintain audited financial statements (mandatory in most cases)
    • Ensure proper bookkeeping and segregation of income types (e.g., qualifying vs. non-qualifying for free zones)
  3. File the Return Online:
    • Log in to EmaraTax
    • Fill in relevant details (income, exemptions, adjustments)
    • Upload any required documentation
    • Submit before the due date
  4. Pay Any Tax Due

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⚠️ Penalties for Non-Compliance

Failing to register, file, or pay on time can result in significant fines:

ViolationPenalty
Failure to registerAED 10,000
Late filing of returnAED 500 – AED 20,000
Late payment of tax dueMonthly interest on unpaid tax
Inaccurate returns or fraudHeavy fines or criminal charges

đź§® Important Notes for Free Zone Companies:

  • To claim 0% tax as a “Qualifying Free Zone Person”, you must:
    • Maintain adequate substance in the UAE
    • Derive only qualifying income
    • Not elect to be subject to 9% tax
    • Comply with transfer pricing and documentation requirements
    • File your return on time

đź§  Conclusion:

Filing corporate tax is now mandatory in the UAE for most businesses. Even if you’re not liable to pay tax (e.g., income is under the threshold or you’re a qualifying free zone entity), you must still register and file.

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