The Federal Tax Authority (FTA) of the UAE has issued a Public Clarification to guide on determining the first Tax Period for newly established companies under the Corporate Tax Law, effective from 1st June 2023.
The FTA clarified that the first Tax Period for a newly established company, particularly juridical persons, is aligned with the first Financial Year as stipulated under the Commercial Companies Law. This period can range from 6 to 18 months and does not require special application to the FTA unless a change in the Tax Period is necessary.
The Clarification also addresses the procedures for Tax Deregistration in cases where businesses cease operations during the first Tax Period. Even if a company dissolves, it is still required to register for Corporate Tax and apply for Deregistration within three months of the cessation event.
This announcement is aimed at increasing awareness among new businesses and ensuring compliance with the UAE's Corporate Tax Law. The FTA emphasized that the first Tax Period will apply to activities starting from the company’s first Financial Year that begins on or after 1st June 2023, with specific rules for non-resident companies and those managed in the UAE.
News Source: Emirates News Agency
