Member News

General Guidelines for Corporate Tax Returns

1. Submission Timeline

• Tax returns must be completed and submitted via the EmaraTax portal within 9 months of the tax period’s end.

2. Eligible Entities for Filing

• The responsibility of filing falls on:
  • The Taxable Person or their appointed Tax Agent or Legal Representative.
  • The responsible partner in the case of an unincorporated partnership treated as a separate Taxable Person.
  • The Parent Company, in the case of a Tax Group.
• Exempt Persons generally do not need to file a Tax Return unless they meet specific criteria requiring a return.

3. Structure of the Tax Return

• The Tax Return includes 20 Schedules.
• Taxable Persons complete the Sections first, which determine the Schedules they must complete to calculate their Taxable Income.

4. Error Corrections

• Minor errors (reducing tax liability by up to AED 10,000) can be corrected within the current tax period.
• Significant errors must be corrected through a Voluntary Disclosure.

5. Auto-Population of Information

• Data entered during tax registration and into the EmaraTax portal auto-populates certain fields. Accuracy during data input is critical to ensure smooth processing.

Specific Disclosure Requirements

1. Financial Statements

• Mandatory Submission: Taxpayers must submit financial statements alongside their Tax Return.
• Audited Financials: Required for entities exceeding AED 50 million in revenue or availing the Qualifying Free Zone Person (QFZP) benefits.
• Additional Documentation:
  • Valuation certificates for assets under transitional rules.
  • Tax residency certificates for claiming exemptions.
  • Proof of foreign taxes paid when applying for tax credits.

2. Accounting Information

• Taxpayers must provide a standalone breakdown of their financials, including:
  • Profit or Loss Statement
  • Financial Position
  • Other Comprehensive Income (only for accrual-based accounting).

3. Qualifying Free Zone Persons (QFZP)

• QFZPs must segregate Qualifying Income (taxed at 0%) from Other Income (taxed at 9%).
• Additional disclosures include:
  • Substance-related details such as employee data, operating expenses, and outsourcing arrangements.
  • Emirate-wise breakdown of EBITDA and wages.

4. Transitional Rules

• Businesses opting for transitional rules on assets like immovable property or intangibles must complete the associated schedule, including details such as:
  • Ownership history, valuation, and market value.
  • Transfer details, including the name and TRN of the transferee.

5. Transfer Pricing (TP) Disclosures

• Related-party transactions exceeding AED 40 million must be disclosed individually.
• Disclosures must differentiate between gross value and arm’s length value.
• Connected Person transactions exceeding AED 500,000 require reporting.

Key Considerations for Taxpayers

1. Data Accuracy in EmaraTax Portal

• Accurate data input ensures that relevant schedules are correctly auto-populated, streamlining the filing process.

2. Advanced Data Collection

• Taxpayers should proactively gather:
  • Breakdown of Qualifying and Non-Qualifying Income.
  • Employee and operational data from HR departments.
  • Comprehensive transaction details for Transfer Pricing and asset transfers.

3. Supporting Documentation

• Beyond financial statements, taxpayers should submit additional evidence voluntarily to minimize follow-up inquiries.

4. Tax Elections

• Decisions on irrevocable tax elections, such as opting out of the 0% rate for Free Zone Persons, require careful analysis and proper documentation.

The Importance of Compliance and Preparation

Navigating the UAE’s Corporate Tax landscape requires meticulous attention to detail, particularly with the new disclosure and procedural requirements outlined by the FTA. Key areas for businesses to prioritize include:

• Ensuring the accuracy of information on the EmaraTax portal.
• Collecting and preparing data well in advance of submission deadlines.
• Consulting with tax professionals to make informed decisions on elections and compliance strategies.

How The Knightsbridge Group Can Help

At Knightsbridge Group, we specialize in providing comprehensive tax advisory services to ensure seamless compliance with UAE Corporate Tax regulations. From navigating the complexities of the EmaraTax portal to managing disclosures for Free Zone Persons and Transfer Pricing, our expert team is here to guide you every step of the way. Contact us today at [email protected] to ensure your business is fully prepared to meet its tax obligations efficiently and accurately.