UAE FTA Postpones Corporate Tax Return Deadlines To December 2024

The UAE Federal Tax Authority (FTA) has extended the deadline for filing Tax Returns and settling Corporate Tax Payable to 31st December 2024. This applies to short Tax Periods ending on or before 29th February 2024. The decision is part of Federal Decree-Law No. 47 of 2022, which addresses corporate taxation.

Khaled Ali Al Bustani, Director-General of the FTA, highlighted the authority's commitment to aiding taxpayers. He stated, "We are deeply committed to taking proactive measures that benefit taxpayers. Recognising the potential challenges faced by businesses with a first Corporate Tax period shorter than a year, we have postponed the deadline by which certain taxpayers must file their Tax Return and settle their Corporate Tax Payable, to assist taxpayers in meeting their Corporate Tax obligations, especially for new businesses throughout their first Tax Periods."

The FTA's decision aims to support newly established businesses facing short initial tax periods. Companies incorporated after 1st June 2023 with financial years ending on or before 29th February 2024 are affected. These entities now have until the end of December 2024 to file returns and pay taxes.

Al Bustani further explained, "Our goal is to encourage timely and accurate tax filings by offering a reasonable timeframe for taxpayers to fulfil their obligations, thereby alleviating undue pressure and potential administrative penalties. This Decision reflects our ongoing commitment to fostering a supportive and equitable tax environment in the UAE that encourages timely compliance while minimising tax burdens."

For instance, if a company was set up on 10th June 2023 with its financial year from January to December, its first tax period would be from June to December 2023. Initially, it needed to file its return by September 2024 under the Corporate Tax Law. However, FTA Decision No. 7 of 2024 now extends this deadline to December 2024.

This extension is designed to ease compliance pressures on businesses during their initial operations. By allowing more time for tax-related processes, companies can better manage their financial obligations without facing penalties.

The FTA's decision underscores its dedication to creating a fair tax environment in the UAE. By postponing deadlines, it aims to reduce administrative burdens while promoting timely compliance among businesses.

With inputs from WAM