1. Tax Calculation
Businesses must compute their taxable income using IFRS-compliant financial statements and apply relevant deductions.
- IFRS Standards: Companies must follow International Financial Reporting Standards (IFRS) to ensure accurate financial reporting.
- Deductions: Allowable deductions include business expenses, depreciation, and interest payments.
- Exemptions: Certain types of income, such as qualifying dividends and capital gains, may be exempt from taxation.
2. Tax Return Preparation
Companies must prepare and file an annual corporate tax return based on the following tax rates:
- 9% Corporate Tax applies to profits exceeding AED 375,000.
- 0% Corporate Tax applies to qualifying Free Zone income, provided businesses meet specific conditions.
- Financial Statements: Businesses must submit complete financial records as per IFRS guidelines.
3. Timely Filing
Companies must ensure their tax returns are submitted within 9 months after the end of their financial year.
- Standard Deadline: If a company’s financial year ends on December 31, the tax return must be filed by September 30 of the following year.
- Alternative Deadlines: If a company follows a different financial year, the tax return is due within 9 months after its financial year-end.
- Penalties: Late filings may result in financial penalties, so businesses must ensure timely submission.