Dubai Corporate Income Tax Update: Extended Filing Period for New Businesses6 min read
- 03.10.2024
- Posted by: Malavika Kolera
- Category: Dubai
The UAE Federal Tax Authority (FTA) has issued an important update regarding Corporate Income Tax deadlines. FTA Decision No. 7 of 2024, issued on 25.09.2024 and effective immediately, provides crucial extensions for certain businesses. This decision significantly impacts new companies in Dubai and the UAE, offering them more time to comply with their tax obligations.
Key Points of FTA Decision No. 7 of 2024
- New Deadline: 31.12.2024
- Applies to filing tax returns and settling corporate income tax payable
- Eligibility Criteria:
a. Taxable Persons incorporated, established, or recognized under UAE legislation on or after 01.06.2023
b. Tax Periods ending on or before 29.02.2024
Detailed Breakdown of the Extension
For Tax Return Filing
Article 2, Clause 1 of the Decision states that eligible Taxable Persons now have until 31.12.2024 to file their Tax Returns. This extension applies specifically to:
Businesses incorporated on or after 01.06.2023
Those with a Tax Period ending on or before 29.02.2024
For Corporate Income Tax Payment
Similarly, Article 2, Clause 2 extends the deadline for settling Corporate Income Tax Payable to 31.12.2024 for the same group of eligible businesses.
Who Benefits from This Extension?
This decision primarily targets newly established businesses in the UAE, particularly those that:
- Were set up in the latter half of 2023 or early 2024
- Have a first tax period shorter than the standard 12 months
- Would have faced their first tax filing deadline earlier in 2024 under previous rules
Example Scenario
Consider a company incorporated on 15.07.2023 with a financial year ending 31.12.2023:
Original Scenario: Would have needed to file its first tax return and pay Corporate Income Tax by 30.09.2024
New Scenario: Now has until 31.12.2024 for both filing and payment
Implications for Businesses in Dubai and the UAE
- Extended Preparation Time: New businesses now have additional months to ensure accurate tax returns.
- Improved Cash Flow Management: The extended payment deadline allows for better financial planning.
- Alignment with Business Setup Timelines: Recognizes the challenges new businesses face in their initial months of operation.
Implications for Businesses in Dubai and the UAE
This FTA decision confirms UAE’s commitment to maintaining an attractive business environment. Such accommodating measures demonstrate the region’s support for new businesses, especially for international companies looking to establish or expand in the Middle East.
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