UAE Corporate Tax Guide Published for Filing Requirements

The UAE Federal Tax Authority (FTA) has issued a comprehensive Corporate Tax Guide detailing the filing and compliance requirements under Federal Decree-Law No. 47 of 2022, which mandates corporate tax filings for companies operating in the UAE.

 Key Highlights:
– Tax Return Composition: Taxpayers must complete various sections and schedules that capture data specific to their operations, including income, deductions, exemptions, and any relevant business activities.
– Special Provisions and Exemptions: Certain entities like government bodies, government-controlled entities, and Free Zone businesses may qualify for specific tax exemptions, with particular schedules and filing requirements for each type.
– Elections and Reliefs: The guide offers provisions for Small Business Relief, Business Restructuring Relief, and Foreign Permanent Establishment exemptions, each impacting the calculation of taxable income.
– Documentation and Deadlines: Companies are required to file returns online via the FTA’s EmaraTax portal within nine months of the tax period’s end, including any supporting documents based on entity type and applicable elections.

Transfer Pricing Rules and Disclosure Requirements

The guide also includes significant updates on transfer pricing and disclosure requirements, aimed at ensuring fair taxation for entities engaged in transactions with related or connected parties:

– Transfer Pricing Compliance: All transactions with related parties must adhere to arm’s length principles, meaning that pricing should align with market rates. Recognized methodologies—such as the Comparable Uncontrolled Price or Cost-Plus methods—should be used to establish arm’s length prices. If an alternative method is used, this must be clearly disclosed.

– Detailed Disclosure Obligations: The guide mandates specific thresholds for disclosure:
  – Related Party Transactions: Must be disclosed if they exceed AED 40 million, with any single category of transactions over AED 4 million requiring separate disclosure.
  – Connected Person Transactions: Transactions with Connected Persons over AED 500,000 must be reported, detailing each Connected Person’s name, type of transaction, and financial information.

– Documentation and Adjustments: Companies are responsible for maintaining documentation that supports their transfer pricing methods. If a transaction deviates from the arm’s length standard, adjustments may be required, especially when claiming downward adjustments in taxable income, which need FTA approval.

These transfer pricing and disclosure rules enhance transparency and compliance with UAE corporate tax law, particularly for multinationals and entities with intercompany transactions.

The guide aims to assist UAE businesses in fulfilling corporate tax obligations, with additional resources accessible through the FTA’s EmaraTax portal.