United Arab Emirates

CT registration, Tax return and Payments

Every Taxable Person will be required to electronically register for UAE CT with the FTA within a prescribed timeline and obtain a Tax Registration Number. The registration would need to be undertaken even if the Taxable Person has already been registered for VAT purpose.

In order to keep the administrative burden on taxpayers to a minimum, the CT Law requires a Taxable Person to file only one tax return for each tax period. 

The filing will need to be done electronically no later than nine months from the end of the relevant tax period. Any UAE CT payable will also need to be settled within these timelines.

Please see examples in the table below: 

Financial Statements

A Taxable Person may be required to submit the financial statements used to determine the Taxable Income for a tax period in the form and manner and within the timeline prescribed by the FTA.

The Minister may issue a decision setting out which categories of Taxable Persons are required to prepare and maintain audited or certified financial statements.

TP Documentation

The following TP documentation requirements could be applicable for Taxable Persons (in both Mainland and Free Zone):

• The FTA may require a Taxable Person to file a disclosure form along with the Tax Return, containing information regarding the transactions and arrangements with Related Parties and Connected Persons;
• In case conditions prescribed by the Minister are met, a master file and local file must be maintained. The master file and local file should be submitted within 30 days upon request of the FTA.
• The FTA may also require any Taxable Person to submit (within 30 days) any information supporting the arm’s length nature of the transactions and arrangements with Related Parties and Connected Persons.

The threshold / exemption conditions have not yet been set and are likely to be mentioned under a separate decision of the Minister. It is to be seen if a consolidated local file could be prepared for a Tax Group which could significantly reduce the administrative burden for many taxpayers.

Furthermore, the above TP documentation requirements will not be applicable to a Taxable Person that would be eligible for Small Business Relief.

Record Keeping

A Taxable Person must maintain all relevant records and documents for a period of seven years following the end of the tax period to which they relate.

Tax Period

A Taxable Person’s tax period is the financial year (the Gregorian calendar year, or the twelve-month period for which financial statements are prepared) or part thereof for which a UAE CT return is required to be filed.

A Taxable Person can make an application to the FTA to change the start and end date of its tax period, or use a different tax period, subject to conditions to be set by the FTA.

Clarifications

A Person can make an application to the FTA for a clarification regarding any part of the UAE CT Law or for concluding an advance pricing agreement for a transaction or arrangement. The form and manner of the application is to be confirmed by the FTA.

Tax Assessment

A Taxable Person may be subject to a UAE CT assessment in accordance with the Tax Procedures Law. In case a non-compliance to the CT Law will be identified during the assessment, penalties and fines determined per Tax Procedures Law could be imposed. 

Other Points

The FTA will be responsible for the administration, collection, and enforcement of UAE CT, while the MOF will remain the ‘competent authority’ in terms of international tax agreements and the exchange of information for tax purposes.

General Anti Abuse Rule

In line with international best practice, the UAE CT Law includes general anti-abuse rules (‘GAAR’), which apply to transactions giving rise to a tax advantage where no valid commercial reason exists and where the tax advantage was the main or one of the main purposes of the transaction.

Where the GAAR applies, the FTA can make a determination that one or more specified CT advantages are to be counteracted or adjusted. If such a determination is made, the FTA must issue an assessment giving effect to the determination and can make compensating adjustments to the UAE CT liability of any other Person affected by the determination.

In any proceeding concerning the application of the GAAR, the FTA must demonstrate that the determination made is just and reasonable.