Businesses in the United Arab Emirates, prepare for the initial submission of corporate tax returns

UAE Companies Prepare for First Corporate Tax Filing Deadline

As the UAE prepares to implement its corporate tax law on January 1, 2024, businesses across the country are gearing up for the first tax filing deadline on September 30, 2025.

The deadline applies to all companies, with separate deadlines for businesses on different fiscal years. Failure to file on time could lead to significant financial and operational consequences, including escalating penalties, liquidity pressures, reputational setbacks, and long-term reputational damage.

To avoid last-minute system congestion on the FTA portal, companies are advised to file well before the deadline. Liquidity is emerging as a key concern for many firms, as the tax obligation is now an unavoidable line item. Accurate reporting of opening balances as of January 1, 2024, is crucial to avoid disputes and additional penalties.

Compliance under the new tax regime is not just about avoiding penalties, but also about empowering leaders with clarity, control, and confidence. A wrong choice in strategic decisions, such as adopting the Realisation Method, could create major tax implications.

The UAE's transfer pricing rules, requiring full disclosure of related-party transactions, could be challenging for companies with informal or incomplete records. Companies in the United Arab Emirates subject to transfer pricing rules are typically large businesses engaged in cross-border related-party dealings, especially those meeting thresholds set by the UAE's Economic Substance Regulations and transfer pricing guidelines. These include multinational corporations and subsidiaries with significant transactions with related parties, mandating documentation and transparency under UAE Federal Decree-Law No. 47 of 2022 on the Tax Procedures Law.

Businesses in Free Zones must carefully review their eligibility for the zero per cent tax benefit to avoid losing it for the next four years. Many SMEs may have gaps in their reconciliations and financial records due to years of operating without audits. It is essential to ensure all accounts are audited and reconciled before the filing deadline.

To strengthen liquidity planning, companies should ensure cash is available for payments. Operational risks may arise for businesses with incomplete records or unreconciled accounts, as transfer pricing rules and disclosure requirements leave little tolerance for informal practices.

In the UAE's new tax era, timely compliance is a measure of corporate governance. Non-compliance undermines credibility with investors, lenders, and regulators. Reputational damage can be severe, and in the long term, could potentially harm a company's standing in the market.

To summarise, UAE companies must prepare for the first corporate tax filing deadline by ensuring accurate records, auditing and reconciling accounts, reviewing eligibility for tax benefits, and strengthening liquidity planning. Compliance under the new tax regime is about more than just avoiding penalties; it's about empowering leaders with clarity, control, and confidence.

Businesses in the United Arab Emirates, prepare for the initial submission of corporate tax returns