2025 UAE Corporate Tax Return Filing Guide
Your Trusted Partner for Compliance in the UAE – UHY James
Corporate Tax Return Filing Deadline is Approaching!
Timeline: As per the provision of UAE Corporate Tax Law, the corporate tax return must be within 9 months from the end of the financial year. For businesses (as a legal person or natural person) with a financial year ending on 31st December 2024, the first tax return is due by 30th September 2025.
Timely and accurate filing is essential to ensure compliance, avoid penalties, and take advantage of available reliefs.
Who Is Required to File?
The UAE Corporate Tax Law applies to both legal persons (companies) and natural persons (individuals conducting business or business activities exceeding the turnover of AED 1million).
Following categories of business vehicle needs to file a UAE Corporate Tax Return:
• UAE-incorporated companies, including LLCs, PSCs, and PJSCs (other than exempt entities)
• Free zone entities, even those eligible for the 0% tax rate
• Foreign companies with a Permanent Establishment (PE) in the UAE
• Individuals conducting business or business activities in the UAE with an annual turnover exceeding AED 1 million (e.g., freelancers, consultants, sole proprietors)
Key Steps to Prepare for the 2025 UAE Corporate Tax Filing
Whether you're a business owner or an independent professional, taking proactive steps now will ensure a smooth and compliant tax filing process. Here’s what you need to do:
1. Finalize Financial Records
Accurate financial records are the foundation of a successful tax filing. Ensure your records are complete and compliant with UAE regulations.
• Companies: Prepare audited financial statements as required by UAE law.
• Individuals and smaller entities: Maintain accurate management accounts to reflect income and expenses.
• Verify all income, expenses, assets, and liabilities are accurately recorded.
2. Ensure Transfer Pricing Compliance (if applicable)
For businesses with related party (domestic and/or international transactions), transfer pricing compliance is critical to avoid penalties.
• Identification of Related Party(s) and Connected person(s)
• Analyse the business transactions undertaken with related party(s) and/or connected person(s)
• Apply benchmarking results correctly in your financial statements to ensure arm’s-length pricing.
• Prepare and maintain transfer pricing documentation to support your pricing policies during FTA audits.
• Ensure compliance with the UAE’s transfer pricing regulations under the Corporate Tax Law.
3. Reconcile VAT and Financial Data
Reconciling your financial statements with VAT filings is essential to avoid discrepancies and ensure compliance.
• Cross-check financials with VAT filings to confirm consistency in reported taxable turnover.
• File VAT returns on time, typically quarterly, with deadlines one month after the end of the VAT period (e.g., 28th February for the period 1st November–31st January).
• Ensure compliance with Reverse Charge VAT mechanisms for cross-border transactions, if applicable.
4. Get your accounts audited
• Maintaining the Audited financial statement is mandatory when,
o In case qualified Freezone person availing 0% tax incentive (without any thresholds)
o In other cases, when the turnover exceeds AED 50 million.
• If turnover is less than AED 50 million (for other than qualified freezone person availing 0% tax incentive), then corporate tax return can be filed based on management accounts as per IFRS.
• From 1st Jan 2025, special purpose audit is required for tax group return filing (without any thresholds).
5. Evaluate the elections to be opted and Maintain Proper Documentation
Robust documentation is critical for supporting your tax return and claiming eligible reliefs or exemptions.
• Keep detailed records of all expenses, income, and deductions, including invoices, receipts, and bank statements.
• Ensure eligibility for any reliefs or exemptions claimed, such as those available for free zone entities, transitional rule relief, participation exemptions, foreign tax credit.
• Maintain records in accordance with FTA requirements for at least 7 years.
6. Review Registration and Compliance Obligations
Proactively address your compliance obligations to avoid penalties and ensure a smooth filing process.
• Confirm your Corporate Tax Registration with the Federal Tax Authority (FTA).
• Verify your Tax Registration Number (TRN) status and ensure it is active.
• Address any outstanding compliance issues, such as unregistered taxable activities or overdue filings.
Consequences of Missing the Deadline
Missing the UAE corporate tax return filing deadline can lead to significant penalties and complications, including:
• Penalties will be imposed.
• Interest Charges will accrue on unpaid taxes at rates determined by the FTA.
• Loss of Tax Reliefs: Late filing may result in the inability to claim certain exemptions or deductions, such as the 0% tax rate for qualifying free zone entities.
• Audits and Scrutiny: Non-compliance may trigger FTA audits, leading to additional scrutiny and potential fines.
How UHY James Can Support You
At UHY James, we provide expert corporate tax solutions tailored to both companies and qualifying individuals in the UAE:
• Corporate Tax Return Preparation and Filing: Comprehensive support to ensure accurate and timely submissions.
• Transfer Pricing Benchmarking and Documentation: Expert guidance to meet UAE transfer pricing requirements.
• Tax Planning and Advisory Services: Strategies to minimize tax liabilities and maximize reliefs.
• FTA Representation and Ongoing Compliance Reviews: Full support during audits and ongoing compliance management.
• Financial Audits and Accounting Support: Assistance with preparing audited financial statements and maintaining compliant records.
Our experienced team is here to guide you every step of the way, ensuring compliance with UAE Corporate Tax Law.
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