On 30 July 2024, the FTA issued an important clarification on corporate tax — CTP003. The clarification relates to the calculation of the first tax period for legal entities in the UAE.
Due to the fact that the Corporate Tax Law does not contain certain provisions necessary for the calculation of the first financial year, which is required to determine the tax period of a legal entity, the FTA has endeavoured to clarify the issues involved, accompanied by practical examples.
The clarifications cover important topics such as how to calculate the first tax period for companies incorporated in the UAE, for foreign companies managed from the UAE and for companies operating in the country through permanent establishments. The clarifications also describe the peculiarities of tax accounting for companies that cease operations during the first tax period.
In this material, we describe how to calculate the first financial and tax period and provide practical examples.
Please read the attached alert for more details