Tax Update: Corporate Tax Return Due 30 September 2024 for Entities Incorporated in June 2023
In light of the recent Public Clarification – CTP003(Clarification), which clarifies the First Tax Period under the Corporate Tax (CT) regime in the United Arab Emirates (UAE), the Federal Tax Authority (FTA) has updated the Tax Registration Certificate to reflect the first tax period. Previously, the certificates indicated a submission deadline of September 2025, but this has now been revised to September 30, 2024. Additionally, the form for CT returns has been made available for entities incorporated in June 2023, facilitating compliance with the Public Clarification.
Implication of the Recent Update:
- The FTA clarified that the First Tax Period under the CT regime should be between 6 and 18 months.
- For the entities incorporated in June 2023 and with a financial period of January to December, the Clarification confirms that the First Tax Period will be from the incorporation date to December 2023 (rather than June 2023 to December 2024 or January 2024 to December 2024).
- As a result, the first CT return for such entities is due by 30 September 2024. However, the CT returns were not available on the EmaraTax portal when the clarification was published.
- In contradiction to the Clarification, some entities incorporated in June 2023 and registered for CT before the publication of the Clarification received a Tax Registration Certificate indicating a First Tax Period from 1 January 2024 to 31 December 2024, and with CT return due by 30 September 2025, or without specified First Tax Period details.
- On 18 September 2024, we observed that the CT return is now populated on the EmaraTax Portal, and the FTA updated the previously issued Tax Registration Certificates to reflect:
- The First Tax Period from 1 June 2023 to 31 December 2023, and
- The deadline to submit the CT return for the First Tax Period is 30 September 2024
Next Steps:
- For entities incorporated in June 2023 and registered for CT: Check your Tax Registration Certificate for updates. Download the latest version to confirm any changes.
- For entities incorporated in June 2023 and the CT registration application under review by the FTA: Request the FTA to expedite the processing of your application.
- Additional Recommendations:
- Prioritize finalizing the books of accounts for the First Tax Period from 1 June 2023 to 31 December 2023.
- If the CT return is available on the EmaraTax portal, ensure submission before 30 September 2024 deadline to avoid administrative penalties.
- Consider reaching out to the FTA to request a deadline extension if feasible.
Outstanding Matters:
- Entities seeking Free Zone Relief must maintain audited financial statements for Qualifying Free Zone Person (QFZP) status during the First Tax Period. Completing the audit before filing the return may be challenging due to the limited timeframe.
- Affected entities are encouraged to submit requests to the FTA via the EmaraTax portal for further guidance on maintaining QFZP status.
Our team of tax advisors, finance experts, and accountants is here to help you submit your Corporate Tax return in time.
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