FTA issues decision Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods

FTA issues decision Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods

FTA Decision No. 7 of 2024 has been issued to postpone such deadlines, effective from 25 September 2024. The FTA has issued a Corporate Tax Public Clarification -CTP004 on Oct 10,2024. This Public Clarification is intended to clarify the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods.

Concise overview:

• The FTA issued Decision No. 7 of 2024 on the Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable on 31st December 2024 for Certain Tax Periods for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments.

• Taxable Person incorporated, established or recognized under the applicable legislation of UAE, on or after 1 June 2023 and Tax Period of the Taxable Person ended on or prior to 29 February 2024.

• The FTA’s Decision states that the due date for filing the Corporate Tax Return for Taxable Persons with a short Tax Period that ends on or before 29th February 2024 (e.g. those ending on 31st December 2023, 31st January 2024 or 29th February 2024) is postponed to 31st December 2024, and the Corporate Tax Payable for these Tax Periods may now also be settled with the FTA by 31st December 2024. which resulted in a in a shorter first tax period than the usual 12 months.

• For example, a company set up on June 10, 2023, with a financial year running from January 1 to December 31, would have its first tax period from June 10, 2023, to December 31, 2023. Before, this company needed to file its tax return and pay corporate taxes by September 30, 2024. With the new decision, the deadline is moved to December 31, 2024.

• Concluding remarks: The FTA has recently aligned the first tax period in the Emara tax portal for the entities incorporated on or after 1 June 2023 and issued a revised tax registration certificate. The revised Tax certificate clarified that the first return for ‘calendar year end’ companies incorporated on or after 1 June 2023 (and before 30 June 2023) must be filed on or before 30 September 2024. The FTA decision provides much needed relief by providing the extension i.e. Postponed to 31st December-2024