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In the UAE, tax persons must strictly follow the Corporate Tax timeline to ensure timely compliance. This involves filing the tax return for each 12-month tax period within 9 months of the end of the relevant financial year. Along with the return, businesses are expected to maintain comprehensive financial statements that accurately reflect their financial position during that period. Adhering to these deadlines is crucial to avoid penalties and ensure that the business remains compliant with UAE tax regulations.

Each tax period, whether it aligns with the entire financial year or a specific portion of it, necessitates the need for submission of a tax return by the taxable person. In the UAE, the tax period is typically based on the Gregorian calendar year or the 12-month period for which financial statements are prepared. This structure ensures consistency in reporting and compliance, regardless of whether the tax period is the full year or part period.

When an entity identifies an error after submitting its tax return, a voluntary disclosure must be made. This disclosure should be submitted within 20 business days from the date the error is recognized to ensure compliance and avoid potential penalties.

If a business fails to file its corporate tax return by the timelines, penalties will be imposed. For the first 12 months of delay, a fine of AED 500 per month, or part thereof, will apply. If the delay exceeds 12 months, the penalty increases to AED 1,000 per month, or part thereof, until the return is properly filed.

The corporate tax liability must be paid in full by the deadline for filing the tax return. Failure to settle the payment on time will lead to monetary penalties imposed by the Federal Tax Authority as mentioned below:

A monthly penalty of 14% per annum will be imposed on any unsettled payable tax amount, calculated for each month or part thereof, starting from the day after the original due date of payment. This penalty will accrue monthly thereafter until the amount is paid in full.
For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment shall be as follows:
1. In the case of a Voluntary Disclosure, the due date is 20 business days from the date of submission.
2. In the case of a Tax Assessment, the due date is 20 business days from the date of receipt of the assessment.