Your Second Corporate Tax Return: What the First Cycle Taught Everyone

The Federal Tax Authority's position is that taxable persons must submit their tax returns, or annual declarations, within a period not exceeding nine months from the end of their respective tax periods. There is no national filing date; the deadline is a function of your financial year.

For the large calendar-year cohort that means 1 January to 31 December 2025 is the second tax period, and 30 September 2026 is the deadline. Two things the Authority has stressed are worth restating. All corporate taxable persons have a legal obligation to file their tax returns regardless of the level of income, so a loss-making or dormant year does not remove the filing. And it is not required to submit the tax return and pay the tax due at the same time — filing early and paying at the deadline is permitted, which is useful when the return is ready before the cash is. Understanding how a trade licence works is crucial for compliance.

This is the structural change, and it is where the first cycle's loose ends become the second cycle's problem. Article 10 of Federal Decree-Law No. 28 of 2022 on Tax Procedures is direct about it: if a taxable person becomes aware that a tax return already submitted is incorrect, in a way that resulted in payable tax being calculated as less than it should have been, the taxable person shall submit a voluntary disclosure. Not may — shall. Businesses should consider whether to pursue a licence to trade fully onshore to better manage their tax obligations.

The clause that surprises people is the one about errors that cost nothing. Where a taxpayer discovers an error or omission in a submitted return and there is no difference in the amount of due tax, the return must still be corrected by submitting a voluntary disclosure. A misclassification that nets to zero is still a correction, not a rounding.

The mirror-image clause is more welcome and less used: where a return resulted in payable tax being calculated as more than it should have been, a voluntary disclosure may be submitted. Businesses that over-declared in year one because a treatment was unclear and they took the cautious view are not stuck with it.

The practical order of operations follows from all of this. If year one needs correcting, correct year one. Rolling the fix into year two's numbers produces two returns that disagree with each other and a record that invites the question.

Ministerial Decision No. 84 of 2025 applies to tax periods commencing on or after 1 January 2025, which makes the calendar-year 2025 period the first one it governs. Above AED 50,000,000 of revenue, a taxable person that is not a tax group needs audited financial statements. Every Qualifying Free Zone Person needs them regardless of revenue. And every tax group must prepare audited special purpose financial statements, with no revenue condition attached.

The last of those is the one that catches small groups, because the requirement arrives without any change in their size or activity. If you elected into a tax group during the first cycle for the administrative simplicity of one return, the second cycle is when that election starts costing something.

This is the point on which the most widely circulated material is now wrong. Ministerial Decision No. 73 of 2023 confined the AED 3 million threshold to tax periods ending on or before 31 December 2026, and that date is still printed almost everywhere, including in the Federal Tax Authority's own Small Business Relief guide. Ministerial Decision No. 131 of 2026, issued on 29 July 2026, replaced the clause: the threshold now applies to tax periods commencing on or after 1 June 2023 and continues to apply to subsequent tax periods ending on or before 31 December 2029.

A calendar-year business is therefore claiming it in the return due 30 September 2026 for the 2025 period, and has three further periods after this one rather than none.

That does not make the second cycle a bad place to find out what the first post-relief return will look like. Computing taxable income properly for a period in which the relief means you did not have to is an hour of work now and a considerably longer exercise when it is compulsory and the books were kept on the assumption that precision was optional. The amendment bought time; it did not remove the exercise.

Transfer pricing gets filed under large-company problems, and the documentation thresholds encourage that. Ministerial Decision No. 97 of 2023 requires a master file and a local file only where the taxable person is a member of a multinational group with consolidated revenue of AED 3.15 billion or more, or where the taxable person's own revenue in the tax period is AED 200 million or more.

The arm's-length principle in the Corporate Tax Law is not limited in the same way. A director's loan, a management charge from a related entity, rent paid to a shareholder, goods bought from an affiliate abroad: these are related-party transactions in a company of any size, and the documentation thresholds govern what you must keep on file, not whether the pricing has to be defensible.