Corporate Tax - Financial Records

Frequently Asked Questions

For UAE CT purposes, taxpayers are required to maintain certain records. These include financial statements used to calculate taxable income and any supporting documents that validate the information provided in the CT return or any other filings submitted to the relevant tax authority. Additionally, exempt persons are obligated to retain records that substantiate their exempt status. It is crucial to keep these records to ensure compliance with UAE CT regulations.

For UAE CT purposes, records and documents should be retained for a minimum of seven years after the conclusion of the applicable Tax Period. It is important to keep these records for the specified duration to comply with the record-keeping requirements.

No, unless the group solely consists of UAE resident entities that have successfully formed a Tax Group. In other cases, each UAE entity subject to CT must prepare and maintain its own separate and independent financial statements specifically for UAE CT purposes. Group-level consolidated financial statements cannot be used for the preparation of the UAE CT return unless the Tax Group requirements are met.

No, only specific categories of taxable persons listed in a decision issued by the Minister will be required to prepare and maintain audited or certified financial statements. Not all entities subject to UAE CT will have this obligation.

No, there is no requirement for the consolidated financial statements of a Tax Group to be audited specifically for CT purposes. The obligation to have audited financial statements applies to specific categories of taxable persons as determined by the Minister.

The Federal Tax Authority has the authority to request the submission of financial statements along with the CT tax return. Alternatively, they may ask for the financial statements provided upon their request. The submission of statements to the authority may be required in certain circumstances or upon their specific request.

For UAE CT purposes, the taxpayer’s income, deductions, and credits should be measured in the national currency of the UAE, which is the Emirati Dirham (AED). If a taxpayer receives income or incurs expenses in a foreign currency, those amounts need to be translated into AED. Generally, taxpayers are expected to perform currency conversions on a transaction-by-transaction basis. It means that income received in a foreign currency should be converted into AED at the time it is earned, and deductible expenses in foreign currency should be converted to AED at the time they are accrued.

When converting foreign currency amounts to AED for UAE CT purposes, the applicable exchange rate is determined by the Central Bank of the UAE at the time of translating the foreign currency transaction into the national currency. It is the default exchange rate to be used unless the Federal Tax Authority grants permission for the taxpayer to utilize an alternative exchange rate that better reflects their actual income.

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