As the UAE continues to evolve its tax landscape to meet global standards, the Federal Tax Authority (FTA) has introduced several key updates regarding corporate taxation in January 2025. These updates are part of the nation's broader efforts to bolster economic stability, encourage investment, and ensure compliance with international tax practices. Here's a breakdown of the latest developments and how they may impact businesses operating in the UAE.

One of the most significant updates in January 2025 is the FTA's clarification on the deadlines for filing corporate tax returns. The FTA has confirmed that businesses must submit their tax returns within nine months from the end of their financial year. For companies whose fiscal year ends on December 31, the deadline for submission will be September 30 of the following year.

This clear and straightforward timeline helps businesses prepare for their corporate tax filing and ensures they comply with the new regulations in a timely manner. Companies must be vigilant in adhering to these deadlines, as failure to do so could result in penalties or interest charges.

Federal Tax Authority Launches World's First Tax Refund System for E-Commerce Retail Purchases for Tourists in UAE. The FTA explained that the launch of this new system, in collaboration with Planet, the authorized operator of the VAT refund system for tourists, aligns with the FTA's plans to adopt proactive solutions within the framework of innovation and digital transformation. These plans are driven by creativity to meet future demands, enhancing the UAE's competitiveness in providing services and achieving its vision of being the best government in the world. This significant achievement contributes to improving the country's digital competitiveness and innovation performance indicators globally, supporting the UAE's leadership in all sectors, including tourism and e-commerce. The statement also noted that the FTA, in collaboration with the authorized operator, has developed a plan to include platforms and e-commerce retailers registered with the Authority in the “VAT Refund for Tourists on E-Commerce Purchases” system during their stay in the UAE.

The FTA updated the procedures for businesses making zero-rated exports under the VAT regime. For businesses that export goods and services outside the UAE, VAT will remain zero-rated, but companies must now follow a more specific set of documentation and reporting procedures to ensure they comply with VAT regulations.

The updates are aimed at helping exporters streamline the process of claiming VAT refunds and ensuring that the documentation required for VAT on exports is submitted correctly.

The FTA has made significant investments in improving its digital platforms, allowing businesses to manage their corporate tax affairs more easily. The FTA's online portal now offers features such as real-time tax filing, automated notifications for tax deadlines, and easy access to financial records and tax payment options.

In addition, the FTA has integrated AI-driven tools into the portal that will assist businesses in identifying discrepancies in tax filings, ensuring that they meet all compliance requirements without delays.

Companies must stay up to date with these regulatory changes to ensure they comply with the latest tax requirements. Regularly consulting the FTA's guidelines and seeking professional advice where necessary will help businesses mitigate risks and capitalize on the opportunities that these updates present.