Tomorrow... the deadline for submitting the realistic economic activities report

“Fiscal”: 21 months, a grace period before the deadline for paying corporate tax

The Ministry of Finance affirmed its commitment to ensuring the application of the tax as smoothly as possible.

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The Ministry of Finance confirmed that the deadline for payment and compliance with the corporate tax provides taxpayers with sufficient time, up to 21 months from the beginning of their fiscal year, to prepare for submitting their tax returns and paying the tax.

The ministry said in a disclosure that this is a step in line with the UAE's commitment to ensuring the application of corporate tax as smoothly as possible.

timetable

The Ministry of Finance stated that the timetable for businesses subject to corporate and business tax, whose first fiscal year starts from June 1, 2023 to May 31, 2024, and its second tax year, from June 1, 2024 to May 31, 2025, will be 26 months registered in the system. She indicated that the due date for filing the tax return for the first period will be February 28, 2025. She added that taxable companies whose first fiscal year starts from January 1, 2024 and end on December 31, 2024, and their second tax year from January 1, 2025 to 31 December 2025, it has a registration period in the tax system of up to 33 months, provided that the date due for filing the tax return for the first period is September 30, 2025. And the Ministry of Finance announced in January 2022 that it would introduce a federal tax on business profits (corporate tax), at a rate It amounts to 9% on taxable income that exceeds the amount of 375 thousand dirhams.

Economic activities

In addition, the Ministry of Finance called on companies whose fiscal year ends on December 31, 2022 to submit realistic economic activity reports no later than tomorrow, corresponding to December 31.

And she said, "While the companies that have previously submitted the notification, they must enter the electronic portal to submit notifications and reports of realistic economic activities to avoid paying a fine of 50,000 dirhams."

systems

It is noteworthy that as part of the UAE's commitment as a member of the comprehensive framework of the Organization for Economic Cooperation and Development, and in response to the evaluation made by the European Union's Code of Conduct on Business Taxes of the UAE's tax framework, the country issued regulations for realistic economic activities, which require local companies located Within the UAE lands, and those registered in the free zones, and some other forms of business that engage in any of the “relevant activities” are to maintain and prove a sufficient “economic presence” in the Emirates in relation to the activities for which the “relevant economic activity test” is taken.

Among these activities are banking business, insurance business, investment fund management business, financial leasing business, headquarters business, shipping business, holding company business, intellectual property business, and distribution or service center business.

• The grace period allows taxpayers enough time to submit their returns and pay the tax.

• 50 thousand dirhams fine for delay in submitting reports on economic activities.

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