The National, 14 October 2024: The UAE’s Ministry of Finance has cancelled economic substance reporting requirements for companies with a financial year ending after 31 December 2022.

This move aims to help companies focus on compliance with the UAE corporate tax system.

The amendment to Cabinet Decision No. 57/2020 on economic substance requirements aims to enhance efficiency and tax compliance across the country, ensuring accurate application of tax legislation by all entities subject to it.

The UAE has introduced a federal corporate tax with a standard statutory rate of 9% starting from the financial year beginning on or after 1 June 2023.

It brought the income of companies exceeding Dh375,000 ($102,100) within the taxable bracket, while taxable profits below that level will be subject to a tax of 0%.

While companies are no longer required to submit economic substance notifications or reports for financial years ending after 31 December 2022, they remain responsible for fulfilling compliance obligations for previous years and paying any penalties imposed by the Federal Tax Authority (FTA).

The UAE has also announced a deadline extension for corporate tax returns and payments for some entities.

Businesses with short tax periods ending on or before 29 February 2024, can now file their returns and make payments by 31 December 2024.

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