In a demonstration of its commitment to supporting taxpayers in fulfilling their Corporate Tax obligations, the Federal Tax Authority (“FTA”) has announced the postponement of the deadline to file a Tax Return and settle their Corporate Tax Payable to 31 December 2024, applicable to short Tax Periods ending on or before 29 February 2024.

The FTA issued Decision No. 7 of 2024 on the Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for Certain Tax Periods for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments ("FTA Decision No. 7 of 2024").

His Excellency Khaled Ali Al Bustani, Director General of the FTA, emphasised the FTA's dedication to supporting all taxpayers, stating "We are deeply committed to taking proactive measures that benefit taxpayers. Recognising the potential challenges faced by businesses with a first Corporate Tax periods shorter than a year, we have postponed the deadline by which certain taxpayers must file their Tax Return and settle their Corporate Tax payable, to assist taxpayers to meet their Corporate Tax obligations, especially for new businesses throughout their first Tax Periods.”

His Excellency added: “Our goal is to encourage timely and accurate tax filings by offering a reasonable timeframe for taxpayers to fulfil their obligations, thereby alleviating undue pressure and potential administrative penalties. This Decision reflects our ongoing commitment to fostering a supportive and equitable tax environment in the UAE, that encourages timely compliance while minimising tax burdens."

The FTA’s Decision states that the due date for filing the Corporate Tax Return for Taxable Persons with a short Tax Period that ends on or before 29 February 2024 (e.g. those ending on 31 December 2023, 31 January 2024 or 29 February 2024) is postponed to 31 December 2024, and the Corporate Tax Payable for these Tax Periods may now also be settled with the FTA by 31 December 2024. The Decision is aimed at Taxable Persons incorporated, established or recognised on or after 1st June 2023 that have a financial year ending on or before 29 February 2024, which resulted in a first Tax Period that is shorter than the standard 12-month duration.

For example, if a company was incorporated on 10 June 2023 and had a financial year from 1 January to 31 December, its first Tax Period would be 10 June 2023 to 31 December 2023. Prior to the issuance of FTA Decision No.7 of 2024, it would have had to submit its Tax Return and settle the Corporate Tax Payable by 30 September 2024, in accordance with the provisions of the Corporate Tax Law. However, based on FTA Decision No. 7 of 2024, the deadline to file their Tax Return and settle the Corporate Tax Payable is now 31 December 2024.

The FTA encourages all Taxable Persons to review the Corporate Tax Law and all related legislation and decisions, which are available on its website at www.tax.gov.ae.