The Federal Tax Authority (FTA) has announced a significant extension for businesses in the UAE, postponing the deadline to file Corporate Tax Returns and settle tax payments for specific tax periods to December 31, 2024. The extension applies to businesses with shortened tax periods ending on or before February 29, 2024, offering much-needed relief to newly established companies.
The FTA issued Decision No. 7 of 2024, which aligns with the Federal Decree-Law No. 47 of 2022 on the taxation of corporations and businesses. This move is aimed at easing the burden for businesses incorporated after June 1, 2023, which may have faced first tax periods shorter than the standard 12-month duration.
Khaled Ali Al Bustani, Director-General of the UAE FTA, emphasized the authority’s dedication to supporting taxpayers. “We are deeply committed to taking proactive measures that benefit taxpayers.
Recognising the potential challenges faced by businesses with a first Corporate Tax period 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 in meeting their Corporate Tax obligations, especially for new businesses throughout their first Tax Periods,” Al Bustani stated.
He further elaborated that the goal is to encourage accurate and timely tax filings by providing businesses with a reasonable timeframe to meet their obligations. “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,” Al Bustani added.
Under the new ruling, businesses that have a short tax period ending before February 29, 2024—such as those with periods ending on December 31, 2023, January 31, 2024, or February 29, 2024—can now file their Corporate Tax Returns and pay their dues by December 31, 2024. The decision mainly targets businesses incorporated, established, or recognized after June 1, 2023, that face a tax period shorter than the usual 12 months.
For instance, a company incorporated on June 10, 2023, with a financial year ending on December 31, 2023, would have had to file its Corporate Tax Return by September 30, 2024. However, under FTA Decision No. 7 of 2024, the filing and tax payment deadline is now extended to December 31, 2024.
This extension is part of the FTA’s efforts to offer flexibility to taxpayers and help ease their transition into the new corporate tax system. The authority continues to demonstrate its commitment to creating a supportive tax environment that fosters business growth and compliance.