UAE businesses will get a "generous" window of time to file their tax returns, the Ministry of Finance has said.
"Businesses in the UAE will have up to nine months from the end of the relevant tax period to submit their tax return and pay the federal corporate tax," the ministry said.
The UAE issued its federal corporate tax law on Friday that will levy a headline 9 per cent rate on taxable income exceeding Dh375,000 ($102,000).
Taxable profits below the threshold will not be taxed. No corporate tax will apply on salaries or other personal income from employment — be it in the government, semi-government, or private sector, the Ministry of Finance said last week.
The corporate tax will be effective for financial years starting on or after June 1, 2023.
The UAE's corporate tax regime is based on a self-assessment principle which means businesses are required to ensure that the documents submitted to the Federal Tax Authority are correct and comply with the law.
The new tax regime allows a generous compliance period, for example, businesses with a financial year starting on June 1, 2023, and ending on 31 May, 2024, will have until February 28, 2025, to file their returns and make payments.
“The regime’s payment and compliance deadline allows taxpayers a generous time frame of up to 21 months from the start of their financial year to prepare for filing and making their tax payments — a move that is in line with the UAE’s commitment to ensuring the implementation of the corporate tax regime is as smooth as possible," the statement said.
Where a business's first tax period starts on January 1, 2024, and ends on December 31, 2024, the return and payment would need to be made before September 1, 2025.
The Ministry of Finance has clarified that for ease of the tax administration process, UAE businesses will need to file only one corporate return per tax period. Any related supporting schedules need to be prepared and submitted for each tax period.
There is no requirement to complete a provisional tax return and make an advance tax payment.
In addition, to support start-ups and small businesses, the UAE corporate tax regime intends to provide relief in the form of simplified financial and tax reporting obligations.
The new tax regime also streamlines tax compliance processes for groups of companies. For example, a UAE resident group of companies can form a tax group to be treated as a single taxable entity if they meet specific conditions.
Benefits include efficient cost and time administration, a single tax return for the group and being able to consolidate the amount of group tax paid where some companies make a taxable profit and others have a tax loss, the ministry said.
A business that is subject to corporate tax will need to register with the FTA and obtain a Tax Registration Number. The registration process is expected to start in early 2023.
For a company with a first tax period starting on June 1, 2023, for example, registration would be within a 26-month period from January 1, 2023, to the final return filing date of February 28, 2025, while for a business with a first tax period from January 1, 2024, there would be a 33-month window from January 1, 2023, to September 30, 2025.
The standard statutory corporate tax rate of 9 per cent positions the UAE competitively when compared with other financial centres and developed economies globally.
The average top corporate tax rate for 2022 among EU countries is 21.16 per cent, 23.57 per cent among OECD countries, and 32 per cent in the G7, the Tax Foundation in Washington said.
The UAE corporate tax law exempts certain entities that include those involved in natural resource extraction activities in the country. However, they remain subject to existing local emirate-level taxation.
Other exemptions are available to organisations such as government entities, pension funds, investment funds and public benefit organisations “due to their vital importance and contribution to the social fabric and economy of the UAE”, the ministry said.
Existing free zone entities are exempt from corporate tax in recognition of the fundamental role they play in the promotion of free trade zones and in driving the growth of the UAE's economy.
The Ministry of Finance and the FTA will be hosting a series of corporate tax awareness sessions across the UAE to help businesses understand the new tax regime and be fully prepared for its introduction. Details of the sessions will be announced soon.
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About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
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MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
Where to donate in the UAE
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
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Name: Atheja Ali Busaibah
Date of birth: 15 November, 1951
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World Mental Health Day
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Plastic tipping points
Europe’s rearming plan
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- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
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Read part four: an affection for classic cars lives on
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Read part two: how climate change drove the race for an alternative
Scorebox
Dubai Hurricanes 31 Dubai Sports City Eagles 22
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Tries: Finck, Powell, Jordan, Roderick, Heathcote
Cons: Tredray 2, Powell
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Cons: Carey 2
Pens: Carey
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PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Tomorrow 2021
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Starring: Ayushmann Khurrana, Kumud Mishra, Manoj Pahwa, Sayani Gupta, Zeeshan Ayyub
Our rating: 4/5
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Read part one: how cars came to the UAE
