File Your Corporate Tax Return Accurately In Dubai
We handle ongoing tax return filings and other regulatory submissions, keeping your company compliant with local laws.
Struggling with complex accounting-to-tax profit reconciliations, uncertain about disallowed expenses, or preparing your first annual filing on EmaraTax? KSB Consultancy delivers precise corporate tax return calculations and filing support for UAE businesses.
Key Compliance Requirements
Preparing and submitting your annual Corporate Tax return requires a structured accounting approach:
Standard Tax Rate
9% on taxable net profits exceeding AED 375,000.
Threshold Exemption
0% on taxable net profits up to and including AED 375,000.
Strict Statutory Deadline
Returns and payments must be finalized within 9 months of your financial year-end.
Mandatory Submission
Every entity with an active TRN must submit an annual return, even when declaring NIL taxable income.
How To Determine Your Taxable Income
Taxable income for UAE Corporate Tax is calculated starting from the net accounting profit reported in your IFRS-compliant financial statements, followed by specific adjustments mandated under Federal Decree-Law No. 47 of 2022.
| Step | Adjustment |
|---|---|
| Start | Financial net profit under IFRS or approved accounting standards |
| Add | Non-deductible expenses and disallowed costs |
| Subtract | Exempt income and allowable tax reliefs |
| Subtract | Unused tax losses carried forward, capped at 75% |
| Adjust | Transfer pricing and related-party arm's length corrections |
| Result | Net taxable income |
1. Accounting Profit Baseline
The calculation begins with net profit before tax derived from financial statements prepared under International Financial Reporting Standards (IFRS) or IFRS for SMEs.
2. Non-Deductible Expense Add-Backs
Costs disallowed under UAE tax law must be added back to accounting profit. These include:
Fines, penalties, and late payment charges paid to public authorities.
Client entertainment expenses exceeding the statutory 50% deduction limit.
Unsupported or non-arm's-length related-party payments.
Dividends, profit distributions, and personal drawdowns.
3. Allowable Tax Deductions & Reliefs
Exempt income streams are deducted from profit. These include qualifying dividends and capital gains from participating holdings. Interest expenses are deductible up to the General Interest Limitation Rule cap of 30% of adjusted EBITDA.
4. Application of Tax Losses
Tax losses incurred in previous tax periods may be carried forward indefinitely to offset up to 75% of taxable income in future years, provided ownership continuity requirements are satisfied.
5. Related-Party & Group Adjustments
Intercompany transactions must be adjusted to reflect arm's length commercial terms, eliminating artificial pricing distortions.
Who Must File Corporate Tax Returns?
UAE-resident commercial entities, LLCs, and Public Joint Stock Companies.
Qualifying Free Zone Persons (QFZPs) claiming zero-tax positions.
Non-resident entities operating through a UAE Permanent Establishment.
Entities reporting zero revenue or NIL taxable profit for the financial period.
Step-by-Step Corporate Tax Filing Workflow
1. Financial Statement Finalization: Compiling audited or management financial statements in compliance with approved accounting frameworks.
2. Taxable Income Computation: Preparing detailed working papers adjusting accounting profit for disallowed costs and exemptions.
3. Drafting Return On EmaraTax: Entering financial schedules, revenue classifications, and election claims directly into the FTA portal.
4. Partner Review & Approval: Verifying calculations against statutory tax rules prior to final authorization.
5. Submission & Payment Execution: Submitting the return on EmaraTax and executing tax payments before the 9-month statutory deadline.
6. Seven-Year Archiving: Securing working papers, general ledgers, and transaction proofs for the mandatory 7-year retention period.
Corporate Tax Groups And Consolidated Filing
Related corporate entities can form a Tax Group under Article 40 of the Corporate Tax Law to file a single consolidated tax return.
Eligibility
A UAE parent company must directly or indirectly hold at least 95% of the voting rights and share capital in resident subsidiaries.
Key Benefits
Elimination of intra-group transactions, consolidation of profits and losses, and a single annual return filing.
Avoid Common Return Filing Errors
Filing mistakes expose businesses to unexpected audits and financial penalties:
| Common Filing Error | Compliance Risk | Prevention Strategy |
|---|---|---|
| Claiming 100% Entertainment Costs | Overstated deductions leading to tax shortfalls and fines. | Restrict entertainment deductions strictly to 50% of incurred costs. |
| Omitting Related-Party Working Papers | Disallowance of intercompany expenses under Transfer Pricing rules. | Maintain arm's length documentation for all intra-group charges. |
| Failing to File NIL Returns | Monthly late filing penalties despite zero tax liability. | Submit mandatory NIL returns on EmaraTax before statutory deadlines. |
| Incomplete Loss Carryforward Rules | Disallowance of offset claims exceeding the 75% taxable income cap. | Reconcile historical tax loss registers accurately prior to submission. |
Frequently asked questions
What is the penalty for filing a Corporate Tax return late?
Late filing incurs a penalty of AED 500 per month for the first 12 months, increasing to AED 1,000 per month from the 13th month onward. Late tax payments attract a 14% annual administrative penalty calculated monthly.
Is an audit of financial statements mandatory to file a Corporate Tax return?
Taxable persons with annual revenue exceeding AED 50,000,000 and all Qualifying Free Zone Persons claiming 0% tax status are required to maintain audited financial statements.
How long must supporting tax records be retained?
Under UAE Tax Procedures Law, all financial statements, general ledgers, invoices, and tax working papers must be retained securely for at least 7 years following the end of the tax period.