On September 25, 2024, the Federal Tax Authority (FTA) issued Federal Tax Authority Decision No. 7 of 2024, extending the deadline for corporations to report their company tax returns and settle their company tax liabilities for certain tax periods. This decision aligns with the provisions of Federal Decree-Law No. 47 of 2022, which governs the taxation of businesses and corporations within the UAE.
The new guidelines, effective immediately from September 25, 2024, apply to corporations that meet standards set out within the decision. This article will delve into the role of corporate tax consultant in Dubai for businesses that want to understand about the extended deadline dates and the situations below which those follow:
Key Highlights of Federal Tax Authority Decision No. 7 of 2024
1. Extended Deadline for Filing Corporate Tax Returns
Under Article 2 of the decision, corporations that meet the subsequent standards can now report their corporate tax returns through December 31, 2024:
- Business Formation: The commercial enterprise changed into included, established, or formally identified within the UAE on or after June 1, 2023.
- Tax Period: The commercial enterprise’s tax period ended on or earlier than February 29, 2024.
This extension offers more time for corporations in their early degrees of operation to conform with the tax-filings requirements. For corporations that qualify, the closing date for submitting their tax returns may be postponed from the original due date to the end of the year.
2. Extended Deadline to Settle Corporate Tax Payable
Similarly, corporations that qualify below the identical situations (incorporated or established after June 1, 2023, and with a tax length finishing on or earlier than February 29, 2024) can settle their company tax payable till December 31, 2024. This is according to Article 48 of Federal Decree-Law No. 47 of 2022.
The extension of the payment closing date is a tremendous development because it permits qualifying corporations more time to accumulate sources and ensure compliance with their tax duties without incurring consequences or interest for late payment.
3. Legal Framework and Background
The decision is a part of the wider criminal framework established through the UAE authorities to alter company taxation below Federal Decree-Law No. 47 of 2022, which covers the taxation of groups and corporations. The regulation was designed to modernize the tax gadget and ensure transparency and duty in company tax matters.
The decision changed into additionally issued following a evaluation of key constitutional and criminal documents, which includes Federal Decree-Law No.13 of 2016 (at the established order of the FTA), Federal Decree-Law No. 28 of 2022 (on tax procedures), and Decision No. nine of 2021 (on delegation to the Vice Chairman of the FTA Board of Directors).
What Does This Mean for Businesses?
Businesses that have been established on or after June 1, 2023, and which have a tax length finishing on or earlier than February 29, 2024, can take advantage of the prolonged closing date for each submitting their tax returns and settling their tax payable. This postponement is mainly applicable for newly established corporations and people of their early degrees of operation, letting them align their monetary and administrative approaches more smoothly.
It’s crucial for qualifying corporations/businesses to be aware of the subsequent:
- Ensure Compliance: While the closing date has been prolonged, it’s far essential for corporations to assure that they agree to all different components of company tax regulation, which includes preserving the right monetary facts and reporting any taxable profits accurately.
- Consult Tax Advisors: Businesses must visit tax advisors or specialists to ensure they meet the essential situations for the prolonged cut-off dates and to keep away from any capability consequences for non-compliance.
- Prepare for Future Deadlines: After December 31, 2024, corporations will need to ensure that they continue to be compliant with all future company tax deadline dates.
Conclusion
The FTA’s Decision No. 7 of 2024 is a crucial step toward imparting greater flexibility for corporations newly established up within the UAE. The decision gives those corporations prolonged time till December 31, 2024, to report their company tax returns and settle their tax liabilities for positive periods, making sure smoother compliance with the UAE’s tax laws.
As the UAE maintains to refine its tax framework below Federal Decree-Law No. 47 of 2022, corporations are endorsed to live knowledgeable approximately updates and employ expert tax recommendations to satisfy their duties.
A corporate tax consultant in Dubai can assist corporations navigate complicated tax laws, making sure compliance with the UAE’s company tax regulations. They offer professional recommendations on tax planning, go-back submitting, and optimizing tax liabilities to keep them away from consequences and maximize efficiency.
FAQs
What is the new deadline for corporate tax filing?
The new deadline is December 31, 2024, for businesses incorporated after June 1, 2023, with a tax period ending on or before February 29, 2024.
Who qualifies for the extended deadline?
Businesses incorporated or recognized in the UAE on or after June 1, 2023, and with a tax period ending on or before February 29, 2024.
What is the deadline to settle corporate tax payable?
The deadline to settle corporate tax payable is also December 31, 2024, for qualifying businesses.
Are there any penalties for late filing after the new deadline?
No penalties will apply if businesses meet the new December 31, 2024 deadline for filing and payment.