Corporate Tax Return in Abu Dhabi

Corporate tax is a direct tax on the profits of businesses in Abu Dhabi. The UAE set this up to improve the business scene and attract foreign investors. Filing a Corporate Tax Return in Abu Dhabi is the most basic requirement for any corporation undertaking business processes in Abu Dhabi. The corporate tax regime of Abu Dhabi demands that a corporate tax return be filed in proper form and on time, enabling them to maintain compliance with the various tax laws of the UAE. It would report their income, expenses, and other financial information to the FTA, with correctness in the calculation and payment of taxes by businesses being ensured. Correct filing will avoid fines or legal complications that could stand in the way of uninterrupted business. Timely filing ensures compliance with the law and enables businesses to optimize their tax liabilities, thus making it an important component of corporate governance in Abu Dhabi. Proper tax management enables the companies to concentrate on growth while remaining compliant with the local taxing laws.

Eligibility Criteria for Corporate Tax Return Filing in Abu Dhabi

Unless any particular business is exempted, all businesses, whether SMEs, corporations, or free zones, are required to file a corporate tax return when their annual turnover or their taxable income exceeds AED 375,000. The filing deadline is June 30th of the following year for a company with a financial year-end of December 31st, and within 9 months of the financial year-end for filings with different year-end dates.

These include entities having no taxable or exempt income, respectively; government entities and authorities; nonprofit organizations and charities; and those entities carrying out activities related to education, healthcare, etc. Filing may be exempted for free zone companies, under conditions. Those entities with a valid exemption certificate from the FTA are also not required to file. Specific eligibility criteria and filing obligations may be determined by the FTA or a tax professional.

Corporate Tax Return Filing Process in Abu Dhabi

Steps involved in preparing and filing corporate tax returns:

1. Gather necessary documents and records, including financial statements, invoices, and receipts.

2. Determine the company's taxable income and calculate the corporate tax liability.

3. Complete the corporate tax return form, ensuring accuracy and compliance with regulations.

4. Attach supporting documents, such as financial statements, audit reports, and tax calculations.

5. Submit the return electronically through the Federal Tax Authority's (FTA) online portal.

6. Pay any tax due by the specified deadline to avoid penalties.

Required Documents for Corporate Tax Return Filing in Abu Dhabi

• Tax Registration Certificate: A valid tax registration certificate issued by the Federal Tax Authority (FTA).
• Financial Statements: Audited financial statements, including the balance sheet and income statement, for the relevant financial year.
• Tax Return Form: A completed tax return form, which can be obtained from the FTA website or through a registered tax agent.
• Supporting Documents: Supporting documents, such as invoices, receipts, and bank statements, to support the tax return.
• Audit Report: An audit report from a registered auditor, if the company's turnover exceeds AED 50 million.
• Tax Residency Certificate: A tax residency certificate, if the company is claiming tax residency in Abu Dhabi.
  
  

Who Qualifies for Corporate Tax Exemptions in Abu Dhabi?

• Free Zone Companies: Companies operating in free zones in Abu Dhabi may be eligible for corporate tax exemptions or reduced tax rates.
• Small and Medium-Sized Enterprises (SMEs): SMEs with a turnover of less than AED 375,000 may be exempt from corporate tax.
• Start-ups: Start-ups may be eligible for corporate tax exemptions or reduced tax rates for a specified period.
• Charitable Organizations: Charitable organizations and non-profit entities may be exempt from corporate tax.
• Government Entities: Government entities and public institutions may be exempt from corporate tax.
  
  

Corporate Tax Filing Deadline in Abu Dhabi

• For companies with a financial year ending on December 31, the filing deadline is June 30 of the following year.
• For companies with a different financial year-end date, the filing deadline is within 9 months of their financial year-end date.

Important deadlines for submission:

• February 28 (following the financial year-end): Request for extension of filing deadline (if necessary)
• June 30 (following the financial year-end): Final filing deadline for companies with a December 31 financial year-end
• Within 9 months of financial year-end: Final filing deadline for companies with a different financial year-end date
• Payment of tax due: Same date as filing deadline to avoid penalties
  
  

Understanding Transfer Pricing in Abu Dhabi

Transfer pricing refers to the prices at which goods, services, and intangibles are traded between related parties, such as subsidiaries, affiliates, or branches of a multinational enterprise.

Is Transfer Pricing Required for Corporate Tax Filings?

Transfer pricing is required for corporate tax filings in Abu Dhabi. The Federal Tax Authority (FTA) requires taxpayers to maintain transfer pricing documentation to support their transfer prices.

Transfer Pricing Documentation Requirements

The FTA requires taxpayers to maintain the following transfer pricing documentation:

• Master File: A master file that provides an overview of the taxpayer's global business operations, including its organizational structure, business strategy, and transfer pricing policies.
• Local File: A local file that provides detailed information about the taxpayer's related-party transactions, including the transfer prices used, the methodology employed, and the economic analysis supporting the transfer prices.
• Country-by-Country Report (CbCR): A CbCR that provides a breakdown of the taxpayer's global revenue, profit, and taxes paid on a country-by-country basis.
  
  

Penalties for Non-Compliance

The FTA imposes penalties on taxpayers who fail to comply with the transfer pricing documentation requirements. The penalties include:

• Administrative Penalties: A penalty of AED 50,000 to AED 500,000 may be imposed for failure to maintain or provide transfer pricing documentation.
• Tax Penalties: A penalty of up to 50% of the tax due may be imposed for underreporting of income or overreporting of expenses due to incorrect transfer pricing.
• Interest and Fines: Interest and fines may be imposed on unpaid taxes, penalties, and interest.
  
  

Types of Penalties

The FTA may impose the following types of penalties for non-compliance with Transfer pricing documentation requirements:

• Fixed Penalties: A fixed penalty of AED 50,000 to AED 500,000 may be imposed for failure to maintain or provide transfer pricing documentation.
• Variable Penalties: A variable penalty of up to 50% of the tax due may be imposed for underreporting of income or overreporting of expenses due to incorrect transfer pricing.
• Repeated Offenses: Repeated offenses may result in increased penalties, fines, and interest.
  
  

Benefits of Using Our Corporate Tax Return Filing Services in Abu Dhabi

Choosing our corporate tax return filing services provides many benefits to help businesses not only ensure compliance with tax laws but also optimize their key financial activities:

1. Expertise in Local, Federal, and International Tax Laws

Our experts in Abu Dhabi have great exposure to local tax legislation, together with vast knowledge of the wider UAE federal tax framework. This also includes, among others, international taxation laws regarding double taxation treaties and cross-border tax obligations, which are very critical for multinational companies. Such an understanding of the laws will ensure that your tax return is correct, fully compliant, and reflects your unique tax position as defined by your company-specific financial obligations both domestically and internationally.

2. Minimizing Tax Liabilities Through Strategic Planning

Effective tax filing extends beyond the submission of returns; it covers tactical strategies for minimum liabilities. We analyze the financials of your company, identifying deductions, exemptions, and credits, while implementing strategies to reduce your taxable income. Be it free zone operations or complex international ones, our team strives to tailor a tax plan that will optimize your tax liabilities to help retain more profit within the legal framework of Abu Dhabi and the UAE.

3. Avoidance of penalties and full compliance

This may further lead to considerable penalties, such as fines or any other legal consequence in case of late, inaccurate, or incomplete filing of corporate tax returns. In this respect, our tax filing services are specifically designed so that we ensure all the necessary information is correctly submitted on time before the deadline set by FTA. We make it a point to stay updated about any amendments made to the laws and regulations regarding taxation so that your business is at par with the latest requirements, remains compliant, and avoids costly mistakes.

4. Seamless Process to Save Time, Reduce Administrative Inconvenience

Managing corporate tax returns in-house can be extremely cumbersome and resource-heavy, particularly for complex operations. Our services make the entire process seamless, from collation of financial data, and preparation of documentation to the filing of returns on your behalf. In this way, the administrative burden is relieved from your team, and full attention is directed to core business activities. With our efficient processes and specialist advice, you save time, reduce your stress levels, and are secure in the knowledge that your tax filings are handled accurately.

Why Choose Us for Corporate Tax Return Filing in Abu Dhabi? 

With Reyson Badger handling your company's corporate tax return filing, you are assured of highly qualified tax experts with years of industry experience. Our staff has a proven record of accomplishment in handling the tax returns of businesses, regardless of size, with great skill. We render customized services to meet the peculiar needs of your business and make sure that every single detail about your tax filing is well taken care of. Full support is available to make sure that all the documents are well prepared right up to the actual submission, with precision, accuracy, and compliance. For any consultations or inquiries into our tax return filing services, kindly reach out to us using the contact information provided. Let Reyson Badger be your expert and efficient navigator through the complexities of tax return filing.