UAE Corporate Tax Compliance in Dubai Internet City

UAE Corporate Tax Compliance in Dubai Internet City

Corporate Tax Registration with the FTA

All Dubai Internet City companies must register for Corporate Tax with the Federal Tax Authority (FTA), irrespective of:

• Profit or loss position

• Revenue generation

• Eligibility for the 0% tax rate

• This requirement also applies to dormant or newly incorporated companies.

• Non-registration or delayed registration may result in administrative penalties, even if no tax is payable.

Qualifying Free Zone Person (QFZP) – 0% Tax Eligibility

• To benefit from the 0% Corporate Tax rate, a DIC company must qualify as a Qualifying Free Zone Person (QFZP).

Key Conditions to Qualify:

• Maintain adequate economic substance in the UAE

• Conduct Qualifying Activities, commonly applicable to IT, software development, digital services, and technology solutions

Earn Qualifying Income, such as:

• Income from overseas customers

• Income from other Free Zone entities

• Comply with transfer pricing rules

• Prepare and maintain audited financial statements

• Avoid Excluded Activities, unless within permitted thresholds

Annual Corporate Tax Return Filing

All Dubai Internet City entities must file a Corporate Tax Return annually, regardless of whether:

• All income is subject to 0% tax

• The company incurred losses

• No tax is payable

Key Timeline:

• Corporate Tax Return to be filed within 9 months from the end of the financial year

• Any payable tax must be paid within the same deadline Accurate segregation of qualifying and non-qualifying income is critical for compliance.

Accounting Records & Financial Statements

• Dubai Internet City companies are required to:

• Maintain proper books of accounts

• Prepare IFRS-compliant financial statements

• Retain accounting and tax records for at least 7 years

Audited financial statements are particularly important for:

• Supporting Qualifying Free Zone Person status

• Corporate tax filings

• Transfer pricing documentation

Transfer Pricing & Related Party Transactions

If a DIC company engages in transactions with:

• Group companies

• Shareholders

• Related parties within or outside the UAE

• It must ensure compliance with arm’s length pricing principles and maintain proper transfer pricing documentation, including disclosure forms where applicable.

Penalties for Non-Compliance

• Non-compliance with UAE Corporate Tax regulations can result in:

• Monetary penalties

• Loss of Free Zone tax benefits

• Increased scrutiny from the FTA

• Potential reassessment of prior tax periods

How Gupta Accountants Helps Dubai Internet City Businesses

At Gupta Accountants, we offer specialised corporate tax services for Dubai Internet City companies, including:

• Corporate Tax registration with the FTA

• Assessment of Qualifying Free Zone Person status

• Corporate Tax return preparation and filing

• IFRS accounting and financial reporting

• Audit coordination and support

• Transfer pricing advisory and documentation

• Ongoing corporate tax compliance and advisory

• Our practical approach ensures your business remains fully compliant while optimising available tax benefits.