In the UAE, companies are preparing for their first actual compliance test under the historic corporate tax law as the September 30 deadline for filing corporate tax reports draws near. A new era of financial responsibility and discipline has begun with the introduction of the Act on January 1, 2024, marking a fundamental shift that aligns the nation with international taxation standards.
The risks are considerable, tax experts warn. Fixed fines for the first month, increasing fees for each additional month of late filing, and interest on unpaid tax liabilities starting from the due date are among the increasing penalties that businesses that miss deadlines must deal with.
Filing a corporate tax return won’t be as simple as filing a VAT return,” said Manu Palerichal, CLA Emirates’ CEO and founder partner. Because accuracy is crucial, it necessitates a firm understanding of IFRS standards. A few strategic decisions, such as using the Realisation Method, must also be made on the initial return and cannot be altered thereafter. A poor decision might have significant tax repercussions. For example, tax may be due right away, even in the absence of a sale, if a business revalues real estate.
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