UAE - Preparing for upcoming corporate tax return filings

With the United Arab Emirates (UAE) corporate tax (CT) return filing deadlines approaching for most businesses, taxpayers are advised to take proactive steps to facilitate a smooth and timely compliance process. Based on past filing experiences, early preparation is critical to help minimize last minute challenges.

Below are key action points businesses/taxpayers in UAE should consider starting immediately if not already acted:

Financial Statements and Audit Readiness

• Ensure financial statements are finalized well in advance of the filing deadline to reduce the risk of last minute challenges. Finalize signed audited financial statements where revenue exceeds AED 50 million or Qualifying Free Zone Persons (QFZPs).
• Tax group should prepare and maintain audited special purpose financial statements for FY25, which may include tax-specific adjustments. It is crucial to coordinate with auditors and advisors early in the process to help prevent potential delays.
• Evaluate the impact of Pillar Two (P2) on tax provisioning for FY25.

Preparation for actual tax filing

• Conduct a detailed review and classification of expenses, particularly:
  • Entertainment expenses
  • Fines and penalties
  • Non-deductible or partially deductible expenses
• Engage with internal departments (e.g., HR, Admin, Procurement) early to obtain accurate breakdowns and supporting documentation.
• Document positions taken on deductibility promote consistency and support an audit trail.
• Review impact of any tax elections made in the first tax return (or intended to be made if current year is first return), such as:
  • Small Business Relief
  • Qualifying Group relief 
  • Realisation basis election
  • Transitional provisions
• Compile and validate all supporting data and documentation for such elections.
• Assess whether any disclosures or tax positions require internal approvals.
• Consider whether the business intends to elect the application of depreciation adjustments in accordance with Ministerial Decision No. 173 of 2025, where applicable, and ensure that the relevant conditions and supporting computations are appropriately evaluated and documented.
• Maintain adequate documentation to support the market value adopted for disposals of assets during the Tax Period, particularly where valuations* were not obtained at the opening balance sheet date or first day of the applicable Tax Period.
• For taxpayers who have elected for transition relief in their initial tax period and may generate taxable income from disposal of real estate in FY25, it is essential to ensure that all calculations and documentation, including the valuer's report (if applicable), are prepared and finalized well in advance.

*Taxpayers should maintain valuation documentation relevant to the disposal date, together with the supporting records evidencing the basis of the market value adopted. 

• Identify all related party and connected person transactions.
• Ensure transfer pricing documentation (where applicable) is prepared or underway.
• Validate that pricing policies are aligned with arm’s length principles.
• Assess if any position taken in past returns requires updating due to changes in facts or amendments/clarifications in law.
• Prepare an initial estimate of taxable income and CT liability.
• Ensure adequate provisioning and cash flow planning for expected tax payments.
• Reconcile accounting profit with taxable profit, identifying key adjustments upfront.
• For QFZPs, assess whether periodic reassessment of the conditions prescribed under the UAE CT regime has been performed to confirm continued eligibility for the 0% CT rate and compliance with relevant provisions such as governing of Qualifying Income and adequate substance requirements.
• Validate brought forward tax losses and ensure proper tracking.
• Ensure proper tracking of transfer of losses within Qualifying Group members
• Review any prior period adjustments or accounting changes impacting the current tax computation.
• Allocate sufficient time for internal review and sign-offs of the tax return and computation.
• Align finance, tax, and leadership teams on key assumptions and positions taken.
• Ensure tax return supporting documentation is maintained.
• Organize records in a manner that facilitates easy retrieval in case of review or audit by authorities.

As observed in ongoing reviews by the Federal Tax Authority, tax officers may not be inclined to grant relaxed extended timelines for submission of information and documentation. Accordingly, maintaining complete and organized records upfront is critical.

Portal Readiness (EmaraTax)

• Review and update taxpayer details on the EmaraTax portal (profile, authorized signatories, contact details, etc.).
• Ensure login credentials and access rights are functional and available with relevant personnel.
• Resolve any pending issues or discrepancies on the portal well in advance.
• Confirm that the tax return period aligns with the financial reporting period.
• Assess the availability of the advance CT payment option on the EmaraTax portal, which enables taxpayers to make advance CT payments ahead of the applicable payment deadline.

File Early – Minimize Last Minute Risks

• It is recommended not to wait until the deadline to submit the tax return or initiate the tax payment.
• Early filing helps mitigate risks such as:
  • System slowdowns or glitches on the EmaraTax portal
  • Last-minute data gaps or errors
  • Operational bottlenecks or approval delays

Action Points/ Key takeaways

Early preparation helps support compliance, minimize risk, and lessen pressure as deadlines approach. Businesses are encouraged to start their tax readiness ahead of the filing deadline.