The Federal Tax Authority (FTA) has announced an extension for the deadline to file corporate tax returns and settle tax liabilities, moving the due date to December 31, 2024. The extension applies to tax periods ending on or before February 29, 2024, and is aimed at easing compliance for businesses recently incorporated or recognized after June 1, 2023, whose first tax period is shorter than the standard 12-month cycle.
The FTA’s decision comes under the newly issued Decision No. 7 of 2024, which postpones the deadline for filing corporate tax returns for certain periods, as outlined in the Federal Decree Law No. 47 of 2022, which governs the taxation of corporations and businesses in the UAE. The extension is designed to provide additional flexibility to businesses that may face challenges in meeting the original filing deadlines.
Khaled Ali Al Bustani, Director General of the FTA, highlighted that this extension acknowledges the difficulties businesses may encounter during their first, abbreviated tax period. “We understand the potential challenges faced by businesses with tax periods shorter than a year and have postponed the deadline to ensure smoother compliance,” Al Bustani said. He further added, “This decision reflects our commitment to maintaining a supportive and equitable tax environment in the UAE that encourages timely compliance while minimizing the tax burden on businesses.”
The tax period extension applies specifically to taxable entities that were incorporated, established, or recognized after June 1, 2023, and have financial years ending before or on February 29, 2024. For these businesses, their first tax period may have been less than 12 months, which prompted the FTA to adjust the timeline to give them sufficient time to file returns and settle their corporate tax.
The FTA’s move aligns with its broader goal of fostering a business-friendly tax landscape in the UAE. Businesses that fall under the new guidelines are encouraged to take advantage of the extended deadline, allowing them more time to understand and comply with corporate tax regulations.
In its announcement, the FTA also urged all taxable persons to familiarize themselves with the relevant corporate tax legislation. The FTA’s website offers access to the corporate tax law, related amendments, and other supporting regulations to ensure that businesses are well-informed and can meet their tax obligations without complications.
This extension is expected to benefit many newly established companies as they navigate the UAE’s corporate tax framework for the first time.