FTA has announced Decision no 5 of 2023 on Conditions for Change in Tax Period for Corporate Tax
Corporate Tax Law
- Taxable person is required to file corporate tax return for each Tax Period.
- Tax Period can be the calendar year or the (12) twelve-month period for which financial statements are prepared.
- An application for change of Tax Period can be made to the Federal Tax Authority (FTA), subject to following conditions which have been recently laid down.
Recent FTA decision – Conditions specified for change in Corporate Tax Period
Reason for change: Change in Tax Period can be requested only for one of the following reasons:
- Upon liquidation
- Aligning the financial year for following:
- Formation of Tax Group
- Joining an existing Tax Group
- Aligning Financial reporting with Group companies
- To avail specific tax relief under corporate tax Law in the UAE or foreign jurisdiction
- There is a valid commercial, economic, or legal reason for a change
Change in Tax Period can be requested for following:
- Extend the current Tax Period – Upto maximum of 18 months
- Shorten the next Tax Period – Between 6 to 12 months
Application for change of Tax Period
- Time lines – Within 6 months from the end of the original tax period
- Additional condition – Application can be made only if Tax Return has not been filed for the respective Tax Period
- Change in Tax Period is allowed only for specified cases and for specified reasons
- Change of Tax Period for valid commercial, economic or legal reason will cover vide range of aspects
- Change of Tax Period for the purpose of formation of tax group or availing specific tax relief may not be subject to anti-abuse rule
- Any decision for change of Tax Period should consider above conditions
Disclaimer: UAE Corporate Tax (CT) Law has been recently introduced. This is a summarised version of the CT law sections and it is advised to refer to the detailed law provisions prior to initiating any decisions.
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