Chapter 17 – Tax Returns and Clarifications

The chapter seventeen of the Federal Decree-Law No.47 of 2022 outlines the documentary and procedural obligations for filing returns, preparing financial statements, maintaining records, and complying with transfer pricing rules.

The provisions of this chapter ensure that the tax authority has the required information to verify tax calculations, and promote transparency in corporate taxation.

The earlier chapters provisions for tax computation and deductions, this chapter focuses on how those results are reported and supported. It includes the format and timeline for returns filing, requirements for supporting documentation, record retention periods, and the process to request clarifications from the FTA.

Understanding these provisions is important for businesses to avoid penalties, maintain accurate tax records, and provide clear evidence of their taxable positions at the time of audit.

Article 53 – Tax Returns

All the Taxable Persons in UAE must submit their tax returns to the tax authority in the suggested format, manner, and timeline, i.e., within nine months from the end of the relevant tax period. The FTA may specify a different deadline for submitting a tax return when necessary.

The tax return filing must include the following details:

• The applicable tax period.
• Taxpayer’s name, & address 
• Tax Registration Number (TRN)
• Return submission date
• The accounting basis used in financial statements (e.g., accrual or cash basis).
• The taxable income for the relevant period
• Any tax loss relief claimed by the taxable person under Article 37
• Any tax loss transferred under Article 38
• Tax credits claimed under Articles 46 and 47.
• The corporate tax payable for the relevant tax period.

The FTA may also request additional documents and records if necessary to verify the taxable income and other provisions, which must be submitted promptly.

The Minister may determine special filing methods or formats for the taxable persons as the disclosure of information could impact the national security or the public interest.

The Authority may require persons such as a qualifying benefit fund, qualifying investment fund, public pension or social security fund, juridical persons and any other persons  to submit a declaration.

In certain cases, the authority may request the authorised partner in an unincorporated partnership to file a declaration on behalf of all partners, either by notice or a decision.

The Parent Company must file a consolidated return for the entire tax group.

Article 54 – Financial Statements

The tax authority may request the financial statements used to determine the taxable income, based on the required format, manner, and deadline.

The Minister may require certain categories of taxable persons to prepare and maintain audited or certified financial statements.

For a partner in unincorporated partnerships, the FTA may request statements detailing:

• Total assets, liabilities, income, and expenses.
• Each partner’s distributive share of the above assets and liabilities.
  

Article 55 – Transfer Pricing Documentation

The FTA may request taxable persons to add the details of transactions and arrangements with related parties and connected persons while filing their tax return.

 In case such transactions satisfy conditions set by the Minister, the taxable person must maintain both a master file and a local file in the format suggested by the authority. These files need to be submitted to the FTA within 30 days from the date of request, unless an extension is granted.

Upon request, the taxable person should supply evidence demonstrating that related-party transactions meet the arm’s length principle, again within 30 days or an extended period.

Article 56 – Record Keeping

Taxable persons must keep all records supporting tax returns and enabling the FTA to verify taxable income for a period of seven years after the end of the relevant tax period.

Even exempt entities must maintain records proving their exempt status for seven years.

Article 57 – Tax Period

A tax period is the financial year or part thereof for which a return must be filed.

The financial year of a taxable person may follow the Gregorian calendar year or the 12-month accounting period used for which the table person prepares financial statements.

Article 58 – Change of Tax Period

The taxable persons make an application to the FTA to modify the start and end dates of their tax period or use a different tax period, subject to conditions outlined by the FTA.

Article 59 – Clarifications

Any person may request the authority for clarification of the Federal Decree Law’s application or seek an advance pricing agreement with respect to the transactions or arrangements. Such requests should be made based on the form and manner prescribed by the FTA.

Conclusion

By complying with above provisions, businesses can avoid disputes, penalties, and reputational damage. Failure to comply with corporate tax regulations can lead to major financial and legal consequences.

Businesses operating in the UAE should implement robust tax governance systems, including accurate record-keeping, timely return filing, and proper documentation of related-party transactions. As an FTA-approved corporate tax agent, we will help you maintain full compliance and avoid costly penalties. Contact our tax professionals today!

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