Since the announcement of a Corporate Tax in 2022, many businesses are still researching the scope of the new federal law and whether it applies to them or not. UAE Corporate Tax is going to take effect starting June 1st, 2023.
Therefore, Corporations in the UAE are constantly on high alert for any announcements from the Ministry of Finance regarding all the motions required of them to carry on with their business activity legally.
So, our professionals at Am Audit gave us some insight on who should register for Corporate Tax and how to file Corporate Tax Returns which we are going to cover in today’s post.
Who Should Register for UAE Corporate Tax
UAE Corporate Tax is a Federal Tax which will be implemented by the FTA. As such, Corporate Tax is applicable across all Emirates. Any individuals or groups that are engaged in a business or business activity will be liable to Corporate Tax, given that their revenue or profit exceeds AED 375,000.
For example, freelancers or self-employed individuals won’t be subject to Corporate Tax UNLESS they are engaged in a business or economic activity. On the other hand, businesses in the free zone will have to register for UAE Corporate Tax and file Corporate Tax returns even if they are eligible to benefit from a 0% Corporate Tax rate. Businesses or individuals can register for Corporate Tax online using the Federal Tax Authority Website.
Who should Apply for Deregistration and How
The business or taxable entity should apply for deregistration in there is a cessation of its Business or Business Activity, whether by dissolution, liquidation, or otherwise. Any business or corporation with a Tax Registration Number can apply for deregistration with the FTA.
Keep in mind, the business will not be deregistered unless it has paid all Corporate Tax and Administrative Penalties due and filed all Tax Returns up to the date when it ceased all business activity.
What are The Requirements for Filing Corporate Tax Returns
As we have already established, all taxable businesses (including businesses in the free zone) need to file Corporate Tax returns no later than 9 months from the end of the relevant tax period. Some of the requirements for filing Corporate Tax returns include:
- The Tax Period to which the Tax Return relates.
- The name, address and Tax Registration Number of the Taxable Business
- The date of submission of the Tax Return
- The accounting basis used in the financial statements
- The Taxable business income for the Tax Period
- The amount of Tax Loss relief claimed by the business or taxable person
- The amount of Tax Loss transferred
- The available tax credits claimed
- The Corporate Tax Payable for the Tax Period
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