Businesses around the United Arab Emirates are preparing for their first actual compliance test under the historic corporate tax reform as the September 30 deadline for filing corporate tax reports draws near. The Act, introduced on January 1, 2024, marks a fundamental change that brings the nation into line with international taxation standards and ushered in a new era of financial responsibility and discipline.
The risks are considerable, according to tax specialists. Businesses that miss deadlines are subject to increasing penalties, which include set fines for the first month, escalating fees for each additional month of lateness, and interest on unpaid tax debts that accrues from the due date.
The CEO and founding partner of CLA Emirates, Manu Palerichal, warned that completing corporate tax returns would not be as simple as filing VAT returns. Accuracy is crucial, thus a firm understanding of IFRS standards is necessary. Furthermore, key strategic decisions, such using the Realization Method, must be made on the first return and cannot be altered thereafter. Making the wrong decision might have serious tax repercussions. For example, even in the absence of a sale, tax may be due right away if a business revalues real estate.
Experts are advising businesses to view the September 30 deadline as a turning point because of this complexity. According to James Mathew, managing partner and CEO of UHY James Chartered Accountants, “the corporate tax law is a structural shift in how companies must operate.
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