When a Corporate Tax registered entity concludes its status as a Taxable Person, it is crucial to initiate a Tax Deregistration process with the Federal Tax Authority (FTA).
This process involves settling all Corporate Tax liabilities and penalties, alongside submitting all necessary Tax Returns. Recently, a specific company underwent CT registration, effective from January 1, 2024. However, unforeseen circumstances have led to the requirement for deregistration from Corporate Taxation. Consequently, the FTA mandates the submission of a company’s first and final CT return, covering the period from the effective CT registration date until May 21, 2024. Despite being labelled as the final return, its content and format mirror those of standard CT submissions.
Overview of the New UAE Corporate Tax Return:
The UAE Federal Tax Authority (FTA) has introduced a new Corporate Tax Return form, vital for all entities subject to corporate taxation in the UAE. This summary offers a comprehensive understanding of the form’s contents and structure, facilitating accurate completion.
Key Sections of the Corporate Tax Return
1) Taxpayer Information:
This section captures essential details of the filing entity, including its name, Tax Registration Number (TRN), and details regarding the tax period. Accuracy in providing these details is crucial for regulatory compliance and efficient processing of the tax return.
2) Elections:
This section allows the entity to make various elections that can impact the treatment of income and deductions. These elections might include choices related to relief options, small business relief, or treatment of specific types of income. Carefully consider the implications of each election before making a selection.
3) Schedule of Accounting:
Here, the entity provides a detailed overview of its financial performance, including revenue and expenses. Accurate reporting in this section ensures transparency and provides a clear picture of the entity’s financial status during the tax period under consideration.
4) Tax Computation:
This section calculates the entity’s taxable income after making adjustments for exemptions, reliefs, and non-deductible expenditures. Proper computation is essential to determine the accurate tax liability of the entity and ensure compliance with tax regulations.
5) Taxable Income and Tax Calculations:
This section determines the final taxable income of the entity and calculates the corresponding tax payable based on the applicable tax rate. Accuracy in these calculations is critical to avoid underpayment or overpayment of taxes and ensure compliance with tax laws.
6) Adjustments for Exempt Income:
This section accounts for income sources that are exempt from taxation, such as dividends and profit distributions. Ensure accurate reporting of exempt income to align with regulatory requirements.
7) Adjustments for Reliefs:
Here, entities can claim various reliefs provided by tax regulations, such as relief for transactions within a qualifying group or business restructuring relief. Carefully consider eligibility criteria and provide necessary documentation to support relief claims.
8) Adjustment for Non-Deductible Expenditure:
Items like non-deductible interest expenses, entertainment expenses, and donations fall under this category. Accurately identify and report non-deductible expenditures to comply with tax laws and regulations.
9) Adjustment for Related Party and Connected Persons:
This adjustment addresses transactions with related or connected persons and ensures fair treatment of such transactions for tax purposes. Provide detailed information on related-party transactions to facilitate transparency and compliance.
10) Declaration:
The declaration section is crucial as it represents the entity’s confirmation of the accuracy and completeness of the tax return. By signing the declaration, the entity legally binds itself to the information provided. Include all required details, such as the first and last name in English and Arabic, along with the submission date.
11) Additional Information:
This section provides a space for attaching necessary supporting documents and making declarations as required by the FTA. Proper documentation and clear declarations help substantiate the information provided in the tax return and facilitate the tax authorities’ processing of the return.
