A new document explains how to determine the first tax period for corporate tax purposes. In addition, the clarification addresses the timing of de-registration for corporate tax purposes if business activity ceases before or during the first tax period.
The clarification applies to:
juridical persons that are taxable persons and are subject to the provisions of the Commercial Companies law;
Non-Resident juridicial Persons who have a Permanent Establishment;
Resident juridicial Persons that are incorporated or otherwise recognised under the applicable legislation of a foreign jurisdiction but that are effectively managed and controlled in the UAE.
Below is a brief overview of the main information from the Clarification:
1. The first tax period for juridical persons is not necessarily 12 months - it can be between 6 and 18 months. In these cases, it is not necessary to submit an application to change the tax period.
2. If the first tax period is longer or shorter than 12 months, there is no proportional increase in the thresholds (meaning the thresholds set out in Federal Decree-Law No. 47 of 2022 on the Taxati...