Here is a breakdown of some key information regarding the TP-DF:

Purpose of filing the TP-DF

The following are the FTA’s objectives vis-à-vis filing of the TP-DF by taxpayers:

• TP-DF makes sure that a taxable person is complying with the UAE CT and TP rules and regulations.
• It makes the transactions with connected persons and/or related parties more transparent.
• It helps to recognize the potential risks associated with TP.

What is Included in the TP-DF?

TP-DF includes the following information:

• Information about the entity and its income during the taxable period.
• Information on different types of transactions the taxpayer has undertaken with connected persons and/or related parties during the taxable period.
• Information / Details of connected persons and/or related parties.
• Information on the nature and values of the controlled transactions.
• Information on the market values of the controlled transactions.
• TP methods the taxpayer has utilized to find arm’s length price (ALP).
• Arm’s Length Price (ALP).
• Documents that support the ALP.
• Tax Adjustment.

Who Needs to File the TP Disclosure Form?

The following persons need to file the TP-DF:

• Persons that are taxable for the purpose of CT and conduct transactions with connected persons and/or related parties in a single taxable period.
• Free Zone (FZ) businesses that are involved in transactions with connected persons and/or related parties.
• Businesses that undertake transactions with PEs (permanent establishments).
• Businesses that are involved in financial transactions, intangibles, or intra-group services.

Major Industries that Need to File the TP-DF

Inter-alia, the following key business sectors would expected to file the TP-DF with respect to their transactions with Related Parties and/or Connected Persons:

• Wholesale
• Manufacturing
• Trading
• Services
• Telecommunication
• Oil and Gas
• Insurance
• Financial Institution
• Banking

Requirements of TP-DF

The following are some of the general requirements of the TP-DF:

• Preparing a TP-DF is a prerequisite for businesses who undertake transactions with connected persons and/or related parties in a taxable financial year.
• Annual submissions are required to be done along with CT filing.
• Businesses need to submit the TP-DF along with CT filing online through the MoF (Ministry of Finance) portal.
• The due date for filing the TP-DF along with the CT Return is within 9 months from the end of the relevant tax period.

Exemptions from filing the TP-DF

The following are some of the notified exemptions from filing of the TP-DF:

• Government authorities and Government businesses.
• Businesses that do not carry out any transactions with Connected Persons and/or Related Parties.
• SMEs (Small and Medium-Sized Enterprises) whose transactions with Connected Persons or Related Parties do not exceed the prescribed threshold.

Clarifications required vis-à-vis filing of the TP-DF

Going forward, the following clarifications from FTA would be required while filing the TP-DF:

• Is there any materiality threshold for disclosure or are all related party/connected person transactions to be assessed for ALP and market value?
• Can the CT return and the TP-DF be filed in advance or will the current practice whereby the CT return for the taxpayer is activated by the FTA only when the deadline approaches, continue?
• Will the TP-DF distinguish between transactions between FZ & mainland, such that tax-neutral transactions are treated separately?
• Will the TP-DF recognize the use of “other method” for TP benchmarking purposes, as allowed under the CT law?
• How should the nature of relationship with Related Parties and/or Connected Persons be disclosed?
• How should Tax Group reporting cases get captured, especially where the parent entity files the tax return?
• How should goods / services sold or provided ‘free of cost’ be disclosed?
• How should capital transactions be disclosed?
• How should income received from Connected Persons be disclosed?

Recommendations for Businesses

• Businesses that are subject to file TP-DF must maintain every single detail of their relevant transactions.
• The records and information must be accurate and error-free.
• Businesses must review their TP policies and strategies regularly, with professional assistance from experts, wherever required.
• Businesses should make sure that they also conform to international TP regulations such as those from the Organization of Economic Co-operation and Development (OECD).
• Businesses should consider seeking advice and assistance from relevant experts, so that they are always compliant of the laws and can avoid unnecessary penalties.

Why Choose Taxgian?

TP is a complex subject itself and it makes it harder for businesses to comply with TP regulations. Businesses must take assistance from expert tax agents like Taxgian so that they can comply with all the requirements of CT and TP. The main purpose of  Taxgian is to ensure compliance for your business and our tax agents are proficient in this. We know how hefty penalties affect businesses and we are here to protect your business from such situations.

Seek expert guidance on TP matters from experts at Taxgian. Our experts will simplify the complex subject of TP and its various concepts for you. Our tax agents are experienced and knowledgeable in this field. Contact us at: +971 50 249 8194 or email: info@taxgian.ae. Visit our office at Office # 3006, 30th Floor, Al Attar Tower, near DIFC, Sheikh Zayed Road, Dubai, UAE.

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Tax Gian, a brand of Jitendra Tax Consultants, helps businesses understand and track important dates and deadlines for corporate tax obligations.

Key Corporate Tax Filing Deadlines in the UAE

Businesses in the UAE have to file corporate tax returns within a set timeline, depending on their financial year. The deadlines are timed in such a way that businesses have enough time to prepare their financial books and adhere to tax laws. Some of the key filing deadlines include;

1. First Filing Date for Companies Formed in 2023

Companies incorporated in June 2023 were expected to file their first corporate tax return by September 30, 2024. However, the UAE tax authority extended this deadline to 31 December 2024, which gives these businesses more time to prepare for their returns. That is especially beneficial for those businesses that are still getting accustomed to the new corporate tax law.

2. General Corporate Tax Filing Deadlines

Most of the business entities in the UAE adopt a fiscal year, which is the Gregorian calendar year (January to December). Such businesses will have the first tax filing date as September 2025, which would be calculated on the financial statement prepared during the year 2024. Other businesses that are registered with different fiscal years may have different filing dates.

• Fiscal Year: January 1, 2024 to December 31, 2024

First Tax Period: January 1, 2024 to December 31, 2024

Deadline for Filing: September 30, 2025

• Fiscal Year: April 1, 2024 to March 31, 2025

Opening Tax Period: April 1, 2024 to March 31, 2025

Closing Date for Filing Return: December 31, 2025

3. Specific Filing Dates for Various Tax Periods

For a fiscal year that is not aligned with the calendar year, in other words, companies with financial years from June 1, 2023, to May 31, 2024, will have different return filing dates. The filing period, in this case, will last for 9 months, from June 1, 2024, to February 28, 2025. Businesses with fiscal years from April 1, 2024, to March 31, 2025, have to file corporate tax in UAE by December 31, 2025.

Why is it important to file Timely? 

On-time submission of corporate tax returns helps in avoiding penalties. The UAE tax authority imposes penalties for delay, and the amount may rise depending on the period of delay. There is a fixed penalty on every subsequent month of delay, and also there is a fine on late paid taxes.

To avoid sanctions and to ensure their operations run smoothly, businesses must have their tax returns ready long before filing. This ensures timely submission and keeps the business in good standing with the tax authority; this helps avoid potential complications down the road.

How to Stay Prepared for Corporate Tax Filing in UAE? 

The introduction of corporate tax in UAE has caused most companies to change their accounting and financial reporting practices. It calls for keeping accurate records of all earnings and expenses. This would be of great help in preparing tax returns, besides adhering to other regulatory provisions in relation to corporate tax.

1. Review financial statements regularly:  The financial statements have to be current and reflect earnings and expenses made by the company. Filing taxes then becomes an easier process and is done at the right time.
2. Understand tax rates and exemptions: The UAE has its specific tax rates according to a company’s income. For instance, businesses whose taxable income falls below AED 375,000 are exempt from paying tax. On the other hand, businesses exceeding this amount will pay 9% of income. There is a need to understand the thresholds to ensure proper tax calculation.
3. Consult with Tax Professionals: Corporate tax laws in UAE are quite complicated. Through tax experts like Tax Gian, businesses can avoid errors on their reports and ensure to meet every tax obligation

What are the consequences of missing the deadlines? 

Failure to file tax returns on time results in severe consequences, including:

• Fixed Penalties: Charged for the first month of delay.
• Additional Monthly Penalties: Added for each subsequent month of non-compliance.
• Fine on Unpaid Taxes: Accrues from the due date until full payment is made.

Choose Tax Gian’s Corporate Tax Consultancy Services

Tax Gian is your one-stop solution for every corporate tax matter. We have expert tax consultants who are knowledgeable in corporate tax laws and their important provisions, i.e., Transfer Pricing, Arm’s Length Principle, etc. Learn everything about corporate tax, file your returns on time and comply with all corporate tax requirements with the help of our expert tax agents.

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Tax Gian comprises professional tax agents who track tax updates and amendments in the UAE to ensure accurate knowledge of tax laws. This way, we help businesses comply with the UAE’s ever-changing tax frameworks and deal with tax-related issues. We help you respond to tax amendments, plan and act accordingly.

Here is an analysis of the tax procedures public clarification on tax assessment review;

Purpose of Tax Assessment Review

The FTA has introduced the phenomenon of tax assessment reviews for the purpose of allowing taxpayers to dispute tax assessments if they suspect any errors in the FTA assessment. The taxpayers can request independent FTA officials to review the tax assessment and the penalties imposed as a result. This review will be based on the evidence and facts presented by the taxpayer, along with the FTA audits. If a taxpayer suspects that the tax legislation or tax treaty that was applied was not correct or audit procedures were not correct to determine the imposed penalty or tax difference, FTA now allows to challenge the tax assessment. Note that the taxpayer cannot introduce any new data or information during this process if they missed it previously. There are different mechanisms for giving missed information later on.

Tax Assessment Review Request

• A taxpayer can request independent FTA officials to conduct a review of tax assessment and relevant penalties for which the taxpayer is sure that the FTA did not use the correct procedures.
• The taxpayer should be sure that the documents and information they provided during the tax audit were complete and accurate. Documents provided outside of tax audit periods will not be acknowledged.
• If a taxpayer has already submitted a reconsideration application, he/she cannot request a tax assessment review.
• A taxpayer can submit a request for tax assessment review within 40 business days after the assessment. If he/she is unable to submit the request within 40 days, the taxpayer can also request the FTA to extend the deadline.

Cases that Allow Tax Assessment Review

• If the taxpayer didn’t receive any notification before the tax audit and receives a tax assessment from the FTA, he/she can request a tax assessment review.
• If the taxpayer believes that the confirmations that FTA received from the external parties for the determination of taxable supplies value were not certified, he/she can request a tax assessment review.
• If the taxpayer believes that the tax assessment, he/she received is because the FTA didn’t ask to submit additional supporting documents that were important for the tax audit, he/she can request a tax assessment review.
• If the taxpayer believes that the value of some supplies was incorrectly determined, he/she can apply for tax assessment review.
• If the taxpayer believes that the excess inventory calculated by FTA for the purpose of excise tax was faulty, he/she can apply for tax assessment review.
• If the taxpayer suspects that the tax assessment was incorrectly estimated, he/she can apply for tax assessment review.
• If the taxpayer suspects that accounting miscalculations occurred during the calculation of the due tax, a review can be requested.
• If the taxpayer suspects that some documents submitted during the audit were disregarded or that a transaction was mistreated in tax, a review can be requested.
• If the assessment was issued for tax periods which were not mentioned in the notification of tax audit, the taxpayer can dispute such a tax assessment.
• If the FTA does not send the results of a tax audit to the taxpayer’s registered address, the taxpayer can dispute the tax assessment.

FTA’s Response to a Request

• The FTA must respond to a request for tax assessment review within 40 business days. If more time is needed, the FTA must notify the applicant.
• The FTA can reject the application if the requirements are not properly met.
• The FTA can adjust or amend the tax assessment issued previously.
• The FTA can uphold the tax assessment issued previously.
• The FTA has to notify the applicant once the decision is issued within 5 business days.

Why Choose Tax Gian as your Compliance Partner?

As a business and taxpayer, you should always back yourself up with expert people who are always updating you and tracking your liabilities for you. Tax Gian is your one-stop solution for every tax matter. Simplify your legal and court processes with the help of our tax consultants. Our experts are knowledgeable and qualified and provide you with the best services you need.

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Tax Gian aims to help your business comply with tax regulations in the UAE and avoid heavy penalties. Noncompliance can not only attract penalties but can also damage your reputation in the market. Tax Gian is here with top strategies for compliance and ultimate business success. You can also seek expert guidance from our tax consultants at Tax Gian.

Following is a list of violations and relevant excise tax penalties in UAE for businesses to be mindful of;

     1.  Failure to Maintain Accurate accounting records

All business organisations shall maintain complete and accurate accounting records.

• Penalty: AED 10,000 for the first offence and more on every subsequent offence up to a maximum of AED 20,000
• How to Avoid:: Always design a proper record-keeping practice and an annual audit so that you remain compliant.

2. Failure in Mandatory Timely Tax Registration or Deregistration

Failure to timely register or deregister for excise tax is a very common mistake businesses do.

• Late Registration Penalty: AED 10,000.
• Late Deregistration Penalty: AED 1,000 per month, up to AED 10,000.
• How to Avoid:: Be vigilant and keep track of deadlines while taking prompt action to avoid unnecessary penalties.

3. Late Submission of Tax Returns

Tax returns are to be filed within the time frame as applicable.

• Penalty: AED 1,000 for the first violation, and goes up to AED 2,000 for each repetition that falls within the 24-month period.
• How to Avoid:: You can automate the tax filing process so you are always in compliance.

4. Tax Returns or Forms Completed in Error

Every time you submit or file incorrect returns, it certainly gives rise to serious penalties.

• Fixed Penalty: AED 1,000 for the first offence, and subsequently up to AED 2,000 on offence repetition.
• Additional Penalty: In case the errors cause tax differences, penalties will be equal to the amount of tax difference or at least AED 500.

5. Late Tax Payment

Delays in settling payable taxes attract escalating fines.

• Penalty:
  • 2% of the unpaid tax for the first day after the due date.
  • 4% monthly thereafter, up to 300% of the unpaid amount.
• How to Avoid:: Set reminders and allocate funds to ensure timely payments.

6. Voluntary Disclosures and Errors

If a business identifies errors in its tax return, it must submit a voluntary disclosure promptly.

• Penalty:
  • 5% of the difference if disclosed within the first year.
  • Up to 40% for disclosures made after four years.
  • 50% of the error amount if not disclosed before a tax audit.
• How to Avoid:: Regularly review records to catch errors early and report them immediately.

7. Non-Compliance with Excise Tax Rules

Other violations include failure to display tax-inclusive prices or provide excise goods’ price lists.

• Penalty:
  • AED 5,000 for the first offence, doubling for repeated violations.
  • 50% of unpaid or undeclared tax for serious breaches.
• How to Avoid:: Stay updated on excise tax guidelines and implement compliance checks.

Other Common Administrative Excise Tax Violations and Fines

The UAE government has set forth various administrative penalties that companies need to be aware of:

1. Displaying Prices Without Tax
   • Fine: AED 5,000
   • Higher Penalty: If applicable, a penalty of AED 50,000 or 50% of the tax on the goods will be applied for repeated violations.
2. Transferring Excise Goods Without Compliance
   • Initial Fine: AED 5,000 for the first offence.
   • Increased Fine for Repetition: AED 10,000 for repeated violations.
3. Failure to Provide Price Lists of Excise Goods
   • Taxable entities must provide the Federal Tax Authority (FTA) with up-to-date price lists of excise goods they produce, import, or sell. Failure to do so could lead to penalties, emphasizing the importance of accurate record-keeping.

Practical Steps to Avoid Excise Tax Penalties

1. Maintain Accurate Records
   Ensure all business records, including invoices and tax filings, are accurate and complete. Use reliable accounting software to manage these efficiently.
2. Submit Tax Documents on Time
   Always submit tax returns, registrations, and updates before the deadlines. Mark key dates on a calendar and set reminders to avoid missing them.
3. Train Your Staff
   Provide training to employees responsible for tax compliance. They should be familiar with the UAE’s tax laws and procedures.
4. Hire Tax Professionals

Consider hiring expert tax consultants like Tax Gian to manage filings and resolve complex issues. They can also conduct regular audits to identify gaps.

1. Regularly Review Tax Laws
   One should keep themselves updated about the recent FTA publications and related cabinet decisions; otherwise, they will be in violation of their latest rules.

Why Choose Tax Gian for Ultimate Tax Compliance in UAE?

Hiring the best tax consultants like Tax Gian is the best way to avoid penalties and remain compliant with tax laws in UAE. It is the strategic solution for businesses to stay perfectly aligned and financially healthy without falling victim to costly miscalculations and errors. Tax Gian helps you in being proactive, maintaining precise records, and stay away from serious violations.

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Since it has become integral for most businesses to attach the TP disclosure form along with the CT return, a thorough understanding of it is important. Tax Gian has expert tax agents in UAE that update and guide you comprehensively about all new tax situations and updates.  Prepare your transfer pricing documentation accurately with the help of our experts. We help your business stay ahead and comply with transfer pricing regulations across jurisdictions efficiently.

Here is a detail of key updates on TP disclosure for related party & connected person transactions;

Key Schedules Introduced

The FTA has included the following two schedules in the new tax return guide;

1. Schedule for Related Party Transactions
2. Schedule for Connected Persons

Here is a detail of both;

1. Schedule for Related Party Transactions

This schedule mandates that taxable persons disclose all the high-value transactions of the business with related parties in the TP disclosure form. The threshold is set at 40 million AED, meaning that this schedule must be completed by all taxpayers who conduct transactions with related parties, and the aggregate amount of total transactions in a single financial and taxable year with all related parties surpasses 40 million AED.

A taxable person who exceeds the 40 million AED threshold also needs to disclose individual transaction details of all individual transactions whose amount surpasses 4 million AED.

This does not include dividends declared among related parties, which must not be included when determining the thresholds for total and individual transactions.

Moreover, taxable persons need to report expenditures and revenue separately. They must also provide figures and details of expenditures and types of income for each related party.

According to the new CT return guide, the following details will be required for every reportable related party transaction;

• Related Party Name

Provide the legal name of the related party with which the transaction was conducted.

• Type of Transaction

The drop-down list allows you to select from various types of transactions, such as liabilities, assets, interest, intellectual property, services, goods, or others.

• Related Party Tax Residency Detail

The drop-down list allows you to choose a country in which the related party is a tax resident. You can also choose the UAE.

• TIN or TRN for CT, where available 

Provide the tax identification number (TIN) or tax registration number (TRN) of the counterparty related party. This will be a TIN given by some foreign jurisdiction or TRN for CT UAE.

• Total Expenses/Income

Gross income or total expenses include revenue without deducting expenditures. You need to provide incurred expenses or earned income in relation to related party transactions.

• TP Method Used

The drop-down list allows you to choose from the TP methods: the transactional profit split method, the transactional net margin method, the cost plus method, the resale price method, the comparable uncontrolled price method, or other.

• Description of TP Method Used

If you chose “other” as your TP method, you need to provide a detailed description of the method you used.

• Arm’s Length Value

Provide the value without considering it a related party transaction. Your demonstrated arm’s length pricing should be the same as total expenses/income.

• Tax Adjustment

The portal will calculate this automatically.

2. Schedule for Connected Persons

This schedule mandates that taxable persons disclose all the high-value transactions of the business with connected persons in the TP disclosure form. The threshold is set at 500,000 AED, meaning that this schedule must be completed by all taxpayers who conduct transactions with connected persons, and the aggregate amount of total transactions in a single financial and taxable year with all connected persons surpasses 500,000 AED.

This does not include all transactions with connected persons and applies only where the aggregate benefits or income surpasses the 500,000 AED threshold per connected person, including its related parties.

The following details will be required for every reportable connected person transaction;

• Connected Person Name

Provide the legal name of the connected person.

• TIN or TRN

Provide the TIN or TRN of the connected person if available.

• Benefit or Payment

The drop-down list will allow you to select this.

• Description

Enter the details of payment given to the connected person and the service received by the connected person.

• Amount of Benefit or Payment from Taxpayer to Connected Person

Provide the amount of each and every payment done to the connected person/s in a taxable year. Write for individual payments, not individual connected persons.

• Market Value of Benefit or Service Provided by Connected Person

Consider it a payment made to someone other than a connected person, and write the amount of payment you would have made in that case.

• Tax Adjustment

The portal will calculate it automatically.

Why Choose Tax Gian for your TP Documentation?

Our expert tax agents at Tax Gian help you prepare your TP documentation accurately and efficiently. We also assist you with transfer pricing planning and make TP regulations easy for you. Tax Gian aims to keep you updated about every tax situation in the UAE so that you can ensure your tax compliance. Our knowledgeable tax agents help you comply with the UAE’s ever-changing tax policies. Contact our experts today to learn more about new CT and TP guidelines.

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Tax Gian comprises qualified tax agents that provide top notch tax consultancy, tax assessment and tax advisory services in UAE. We provide expert guidance on the latest tax updates and changes in the tax framework. Our experts help you maintain accurate records in line with the FTA’s requirements.

Here is a detail of the new public clarification regarding the new grace period;

Key Highlights of the Cabinet Decision

Following is an analysis of Cabinet Decision implementing the new grace period;

• The registered businesses can apply to the FTA for rectification of information in the tax records provided to the FTA within 20 business days when needed.

• If a business has provided incorrect information and fails to apply for amendment within the prescribed period, this will be considered a violation of tax laws, and an equivalent administrative penalty will be imposed.

• If businesses successfully update their information in the FTA records within the grace period (1st January 2024 – 31st March 2025), no administrative penalty will be imposed.

• In cases where a penalty is already imposed on a business for not updating information on time before the cabinet decision implemented this grace period, such penalties will automatically be reversed.

• In cases where a penalty was imposed before the introduction of the grace period and the registered business already submitted the penalty amount, in such a case, the submitted amount will return to the tax account of the registered business.

• There is no need for businesses to contact the authority for the reversal of penalties; the FTA will automatically do it.

Types of Amendments in Information

The following types of changes can be done within the grace period;

• Corrections in email address, address, name, etc.

• Corrections in trade licence activities.

• Corrections regarding articles of association, partnership agreements, and legal entity types.

• Corrections regarding business nature.

• Corrections regarding the address from which any business is conducted by the registrant.

Examples

• If a business has registered for corporate tax but accidentally provided incorrect information and failed to amend the details within time, this grace period can be used for that purpose.

• If a registered business opens a new branch but fails to add its details in the tax records and also doesn’t show the trade licence of the new branch to the FTA, this grace period is for such a business.

• Businesses registered for excise tax or value-added tax before registering for corporate tax can use this grace period to update their records with FTA.

Best Practices for Businesses

• Businesses that fall under the scope of corporate tax must register for the coming tax period.

• Businesses should keep their information and records in the most accurate and precise form.

• Businesses should conduct regular audits to determine the accuracy of their financial records.

• Businesses should always be mindful of the due dates and important submissions.

• Businesses should keep tracking newer updates and take advantage of the incentives.

• Businesses should always keep in touch with expert tax consultants like Tax Gian to stay away from unforeseen circumstances.

Why Choose Tax Gian for Expert Tax Consultancy in UAE?

Tax Gian has a group of expert professionals who are highly knowledgeable and trained in their field. They can help you go seamlessly through any tax matter. They also help you in accurate record keeping so that you may not face any issues at the time of reporting. Our experts can take care of your whole tax process for you so that you can focus on business growth.

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Tax Gian are professional and qualified tax agents that help you comply with various tax laws properly. We help SMEs optimise their tax practices and implement the best strategies by providing tailored solutions.

This guide breaks down the essentials of VAT for SMEs in the UAE to be easily understood and implemented.

Understanding VAT Registration for SMEs

SMEs must know the following about registration;

• Compulsory Registration: A business is liable to register for VAT within 30 days, if its taxable supplies exceed AED 375,000 within a 12-month period. Taxable supplies refers to the value of any supplies made, except for exempt supplies such as financial services or local passenger transport.

• Voluntary Registration: If your taxable supplies or taxable expenses fall between AED 187,500 and AED 375,000, you can register on your own. It would be very useful for start-ups which may not have much income but have cost incurring VAT.

• How to Register: The Federal Tax Authority (FTA) online e-services portal provides an online VAT registration form. Businesses just have to follow the steps on the platform to complete the registration process successfully.

Key Compliance Responsibilities for VAT-Registered SMEs

VAT Collection and Recovery

• Output VAT: All registered businesses are obliged to collect VAT on all taxable goods and services sold.

• Input VAT: The business recovers VAT paid on purchases where it has valid invoices and documentation.

Tax Return

Tax returns are filed either quarterly or monthly according to turnover. All SME returns are filed electronically on the FTA portal by the 28th of the month following the tax period. Returns must contain:

• Value of taxable supplies and VAT charged.

• Zero-rated and exempt supplies.

• VAT recoverable on purchases.

Simplifying Record Keeping

For small and medium-sized businesses, financial records are kept for a minimum of five years. These records include;

• Invoices of all supply and procurement.

• Assets and services consumed.

• Adjustments or corrections of invoices or accounts.

Accurate record-keeping helps in compliance with the taxman as well as easy reimbursement and auditing procedures.

Formation of Tax Groups

There is scope for SMEs with related businesses to form a tax group if the financial and regulatory ties they share qualify them for that. This will allow for a single return filing for the group’s VAT, saving on administrative costs. However, all the group members are still liable for VAT together.

Filing and Paying VAT

• Filing Tax Returns: Submit output and input VAT through the FTA portal. These need to be accurate.

• Payment Options: The e-Dirham system offers an alternative mode of payment. Businesses should register their e-Dirham account well in advance to avoid any delay.

Common Challenges and How to Overcome Them

• Threshold Complexity: Understand the mandatory threshold of AED 375,000 and the voluntary threshold of AED 187,500 to ascertain your registration requirement.

• Record Keeping: Execute electronic mode of invoicing and financial documents to retrieve them effortlessly.

• Return Filing: Keep yourself updated about the return deadlines so that no penalty is likely to be encountered. Consider hiring an expert tax consultant like Tax Gian to increase the accuracy level.

Why Choose Tax Gian?

VAT compliance would not be burdensome for UAE SMEs if they understand threshold conditions, keep clear records and use digital tools will ease the process. Tax Gian helps SMEs understand critical compliance aspects and implement best practices. Our experts find the best solutions for your business tailored to your needs.

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Tax Gian provides businesses with the latest insights and updates on taxation in the country. Our expert tax consultants keep you up to date with the ever-changing tax legislation so that you can fulfil your liabilities on time.

What are Virtual Assets?

To understand the provisions of this new exemption, you must know what virtual assets really include. The Cabinet Decision No. 100 of 2024 explains the features of Virtual Assets as;

• These are digitally represented values.
• These can be converted or traded digitally.
• These can be used for investment reasons.
• These are not digitally represented fiat currencies.
• These are not digitally represented financial securities.

Exemption of Virtual Assets from VAT

The original VAT law of 2018 had exempted some financial services from paying VAT in UAE but at that time virtual assets were not included in it. However, the amendments introduced by the latest decision include virtual assets when stating exemptions for financial services. According to the latest decision;

• If someone keeps, controls or manages virtual assets, VAT exemption is available for this.
• If someone converts virtual assets, a VAT exemption is available for this.
• If someone is transferring the ownership i.e., selling virtual assets, VAT exemption is available for this. This includes virtual currencies like Bitcoin, Tether, Ethereum, etc.

Cryptocurrency Exempt from VAT: Good News for Crypto Traders 

Cryptocurrencies are regulated by the Securities & Commodities Authority (SCA) and the Financial Services Regulatory Authority (FSRA) in UAE. The UAE has always welcomed cryptocurrency traders and investors. As part of the UAE’s future development strategies, the Central Bank of the United Arab Emirates is likely to introduce its own digital currency. This clearly demonstrates that the future of cryptocurrencies is bright in the UAE. Moreover, the exemption given to some activities regarding cryptocurrencies and NFTs will open more doors of opportunity for crypto traders and investors. The purpose behind this initiative is to attract crypto investors in the UAE digital market.

Seek VAT Guidance from Expert Tax Gian

If you are a crypto trader or crypto investor, new VAT exemptions can bring great benefits for you. You can seek guidance from experts about how VAT applies to your specific activities and how you can benefit from exemptions. You can also contact our professional tax advisors to talk about any VAT or other tax issues. Our qualified and experienced tax agents will help you according to your specific tax situation.

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Jitendra Tax Consultants helps businesses fulfil compliance and reporting requirements seamlessly and effectively. We ensure that your reporting is error-free and help you deal with reporting and compliance issues.

Here is all you need to know about corporate tax compliance and reporting requirements;

What is Corporate Tax in UAE?

• Corporate tax is a tax levied on business and corporate profits, including services, manufacturing, trading, and other business activities.
• The tax rate is zero per cent for taxable income generated in a tax period that does not exceed 375,000 AED.
• The tax rate is 9 per cent for taxable income generated in a tax period that exceeds 375,000 AED.
• Every taxable person must register for corporate tax in the UAE and pay 9 per cent tax if its annual taxable income exceeds 375,000 AED during a tax period
• Corporate tax is filed annually. Only some large corporations file returns quarterly on FTA’s demand.

Corporate Tax Compliance and Reporting Obligations

• Corporate tax compliance and reporting is a prerequisite for every business that falls under its scope.
• Corporate tax registration is mandatory to comply with corporate tax whenever a business’s annual taxable income exceeds the 375,000 AED threshold. However, there is no threshold for businesses to register for CT; businesses should register if they fall under the definition of a taxable person. Registration needs to be done online through FTA’s services portal – Emaratax
• Businesses that have already registered with corporate tax but cease to be taxable persons must deregister from corporate tax. It is important that no pending tax or penalty is payable; otherwise, deregistration can not be done.
• For corporate tax compliance, businesses need to maintain accurate and transparent financial records and documents. These records are required at the time of reporting, and the FTA can also require these documents if needed. The financial records must comply with UAE-accepted accounting standards, i.e., IFRS (International Financial Reporting Standards).
• For registered businesses, corporate tax returns must be filed annually within the due date. The due date to pay corporate tax is nine months from the end of the tax period. Moreover, some businesses have to file corporate tax returns on a quarterly basis as per FTA’s commands.
• Every business registered for corporate tax must comply with local and international transfer pricing (TP) regulations to comply with CT in UAE.
• Taxable businesses that conduct transactions with connected persons or related parties must comply with the arm’s length principle, which is usually determined using transfer pricing methodologies, such as the resale price method, the cost plus method, etc.
• Businesses that conduct transactions with connected persons or related parties also need to prepare transfer pricing documentation and submit transfer pricing disclosure forms when reporting corporate tax to the FTA.
• Businesses that operate in more than one jurisdiction can also be required to prepare country-by-country reports (CbCR).
• Businesses must comply with UAE international agreements in force, including double taxation agreements, to comply with CT in UAE.

Best Practices for Businesses

• Always consult a qualified tax agent like JTC for better compliance.
• Always keep tracking updates in tax laws.
• Ensure accurate and proper record keeping.
• File your tax returns before the deadline. Save yourself from penalties as much as you can.
• Conduct audits if required. Look for qualified auditors in the UAE.

Why Choose Taxgian?

Taxgian helps your business with various tax matters, such as dispute resolution, transfer pricing, international tax matters, tax optimisation, tax planning, and compliance, etc. Our tax agents have expertise and experience in corporate tax and other taxes in the UAE. Our experts are great at communication and can resolve your issues seamlessly and effortlessly. Contact our experts today and choose the right plan or service for your business.

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Tax Gian are professional and approved tax agents who have expertise in corporate tax and its latest trends in the UAE. By acquiring our assistance, you can resolve any corporate tax matter. Our experts will guide you on how you can qualify for various tax exemptions and incentives in the UAE.

Exemptions from Corporate Tax in UAE

According to the Federal Tax Authority, the following are the categories of exempt persons from corporate tax in the UAE;

• Persons who are automatically exempt

These include government entities. Registration for corporate tax is not required for government entities.

• Persons who notify the MoF and meet the criteria for exemption

These include extractive businesses as well as non-extractive natural resource businesses. Registration for corporate tax is not required for such businesses.

• Persons who are listed in a Decision from the Cabinet and meet the criteria for exemption

These include qualifying public benefit entities and government-controlled entities. These entities have been required to register since 1 Oct 2023.

• Persons who apply to the FTA and FTA approves as well as they meet the criteria for exemption

These include subsidiaries of exempt persons that are completely controlled and owned by the exempt persons inside the UAE. Also, private and public social security funds and pensions, and qualifying investment funds are also included in these. These entities have been required to register for corporate tax in UAE since 1 June 2024.

Other Exemptions

In addition, corporate tax does not apply to the following;

• Employment income or any earning of an individual that is a salary issued by a private or public employer.
• Income or interest earned from deposits in banks or savings schemes by any individual.
• Income earned by a foreign investor from investment returns, royalties, capital gains, dividends, etc.
• Any individual’s income, capital gains, dividends earned from shares or other agreements.

Incentives for Small Businesses

Any juridical or natural person also called a resident person can apply and receive small business relief from corporate tax in UAE. Application for small business relief is required for every taxable period. The revenue generated by the business in the present and past tax periods should be less than or equal to 3,000,000 AED. And this incentive is available up to 31 December 2026.

The Relief: Small businesses that qualify for relief are treated like they didn’t earn any taxable income in the taxable financial year. TP (transfer pricing) documentation is also not required for small businesses. But they have to conform to the arm’s length principle. Moreover, when a small business is getting this relief, no other incentive, relief or exemption will be given to that small business.

Lastly, sometimes businesses are subject to a lot of tax incentives but they are unaware of it. You must get assistance from tax experts like Taxgian in UAE to know how you can qualify to get tax incentives while doing business in UAE.

Why Choose Tax Gian?

Corporate tax compliance and requirements are things that simple accountants cannot manage. You need expert tax agents especially when you are a growing firm/business in UAE. Tax Gian is your one-stop solution for every tax issue. Not only corporate tax, you will get tailored services related to any tax in the UAE e.g., value-added tax, excise tax, etc. Taxation and compliance will become seamless for you once you get in touch with experts at Taxgian. What are you waiting for?

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