A Step-by-Step Guide to Corporate Tax Filings in the UAE

The UAE has long been known for its business-friendly tax environment. However, with the introduction of corporate tax, businesses now need to ensure they comply with the new regulations. Filing corporate taxes in the UAE can seem complicated, but with the right approach, it can be a smooth and manageable process.

At BS Accountant, we specialize in helping businesses navigate corporate tax filings and stay compliant with the new regulations. In this blog, we’ll walk you through the step-by-step process of filing corporate taxes in the UAE and explain how BS Accountant can support you every step of the way.

What is Corporate Tax in the UAE?

Corporate tax is a tax on the profits of businesses operating in the UAE. the UAE government introduced a corporate tax rate of 9% on profits exceeding AED 375,000, while businesses with profits under this threshold are not required to pay corporate tax. This law marks a significant change, as businesses in the UAE were previously exempt from corporate tax.

While this tax rate is relatively low compared to other countries, it’s important for businesses to understand how to file their corporate tax returns and comply with the new regulations.

Step 1: Determine Your Tax Obligations

Before filing your corporate tax return, you need to determine if your business is subject to corporate tax. This depends on your business’s profits. If your profits exceed AED 375,000, your business will be required to file a corporate tax return and pay taxes on the profits.

Even if your business falls below this threshold, it’s important to stay informed about any changes in tax laws or updates to the regulations. You may also need to register for corporate tax, even if you’re not yet liable to pay it.

At BS Accountant, we can help you assess whether your business is required to pay corporate tax and assist with the registration process if needed.

Step 2: Register for Corporate Tax with the FTA

Once you’ve determined that your business is required to pay corporate tax, you’ll need to register with the Federal Tax Authority (FTA). Registration is a straightforward process, but it’s important to have all the required documents in place.

To register for corporate tax, you’ll need:

• Your trade license or business registration details

• Your Emirates ID and passport (for individual business owners or partners)

• Bank account information

• Your business’s tax information

If you’re unsure about the registration process or need assistance, BS Accountant can handle the entire process for you, ensuring all paperwork is submitted correctly.

Step 3: Keep Accurate Financial Records

One of the most important steps in the corporate tax filing process is maintaining accurate financial records. Accurate bookkeeping and accounting are essential for calculating your business’s profits and ensuring compliance with tax regulations.

Make sure to keep detailed records of:

• All income and revenue generated by your business

• All business expenses and costs

• Any deductions or exemptions available to your business

At BS Accountant, we offer professional bookkeeping and accounting services to ensure your financial records are up to date and compliant with the UAE’s corporate tax laws.

Step 4: Calculate Your Taxable Profits

Once your records are in order, you’ll need to calculate your business’s taxable profits. Corporate tax in the UAE is levied on your profits, which are calculated by subtracting allowable expenses from your total income. Allowable expenses include operating costs, employee salaries, and other legitimate business expenses.

It’s important to know which expenses are deductible and which are not. Working with a professional tax consultant will ensure you don’t miss out on any opportunities to reduce your taxable profits.

BS Accountant can help you calculate your taxable profits accurately, taking into account all possible deductions and exemptions.

Step 5: Submit Your Corporate Tax Return

Once you’ve calculated your taxable profits, it’s time to file your corporate tax return with the FTA. The FTA requires businesses to file tax returns annually, typically within nine months of the end of their financial year.

Your tax return should include:

• Details of your business’s income and expenses

• The calculated amount of corporate tax owed

• Supporting documents for any deductions or exemptions claimed

It’s essential to file your corporate tax return accurately and on time to avoid penalties or fines. Late or incorrect submissions can lead to costly mistakes, so it’s important to ensure your filing is error-free.

At BS Accountant, we offer corporate tax filing services to ensure your return is submitted on time and in compliance with FTA regulations.

Step 6: Pay Your Corporate Tax

After submitting your tax return, you’ll need to pay any taxes owed to the FTA. The corporate tax rate in the UAE is set at 9% for profits exceeding AED 375,000, which is relatively low compared to many other countries. However, it’s still important to ensure that the payment is made on time to avoid late fees and interest charges.

BS Accountant can help you manage your tax payments and ensure they’re made promptly. We also offer tax planning services to help you manage your cash flow and minimize tax liabilities.

Step 7: Keep Records for Future Audits

After filing your corporate tax return and making your payment, it’s important to keep all relevant financial records and tax filings for at least five years. The FTA may request to audit your business’s tax returns, and having accurate records will help ensure the process goes smoothly.

We recommend working with a professional accountant to maintain your records in a secure and organized manner. BS Accountant offers secure record-keeping services and will keep your financial data safe and accessible when needed.

How BS Accountant Can Help

Filing corporate taxes in the UAE can be complex, but with the help of BS Accountant, the process can be simplified. Here’s how we can assist your business:

• Corporate Tax Registration: We help you register your business for corporate tax with the FTA, ensuring all documentation is in order.

• Tax Calculation: We calculate your taxable profits and ensure you claim all eligible deductions and exemptions.

• Corporate Tax Filing: We manage the entire tax filing process, from preparing your return to submitting it to the FTA.

• Tax Planning: We provide expert tax planning services to minimize your tax liabilities and optimize your business’s financial health.

• Audit Support: We provide support during tax audits, ensuring your records are accurate and your filings are compliant.

Conclusion

Filing corporate taxes in the UAE can seem challenging, but with the right support, it becomes a manageable process. BS Accountant is here to help your business navigate the corporate tax filing process with ease. From registration to filing and payment, we ensure your business stays compliant with all regulations and minimizes tax liabilities.

Contact BS Accountant today to learn more about how we can help your business manage its corporate tax obligations and thrive in the UAE.