If your company’s financial year does not end in December, your first UAE corporate tax period usually begins with the first financial year starting on or after 1 June 2023. This applies regardless of whether your year end is in March, June, September or any other month. Below are the specific rules and examples based on Federal Tax Authority guidance.
How the starting date is set for non-calendar year ends
A UAE business becomes subject to corporate tax from the beginning of its first financial year that starts on or after 1 June 2023. The tax period aligns with your chosen financial year as long as it has already been established and used for financial reporting before 1 June 2023.
For example, if your company prepares financial statements for a year ending 31 March, your first tax period will be 1 April 2024 to 31 March 2025. If your year ends 30 June, your first tax period will run from 1 July 2023 to 30 June 2024. This ensures consistency between your commercial and tax reporting.
Examples: when does the first UAE corporate tax period start?
The Federal Tax Authority supplies the following illustrative cases:
Financial Year End | First financial year starting on or after 1 June 2023 | First corporate tax period |
|---|---|---|
31 March | 1 April 2024-31 March 2025 | 1 April 2024-31 March 2025 |
30 June | 1 July 2023-30 June 2024 | 1 July 2023-30 June 2024 |
30 September | 1 October 2023-30 September 2024 | 1 October 2023-30 September 2024 |
So, if your business has a 30 June year end, the first tax period is not the 2023 calendar year, but the financial year starting 1 July 2023. Only income and expenses from this period are relevant for the first corporate tax filing.
Using the existing financial year for reporting
You can use your current established financial year for corporate tax purposes, provided it was in use before 1 June 2023 and regularly applied to your company’s commercial accounts. This approach avoids the need to change accounting reference periods or prepare transitional short returns.
For example, a business with longstanding financial years ending in September will have its initial corporate tax period begin on 1 October 2023.
What if you change your financial year end after 1 June 2023?
If a business changes its financial year after 1 June 2023, the Federal Tax Authority may scrutinise such changes. The FTA’s public clarification makes clear that anti-avoidance principles apply. Any shift in accounting period designed to delay tax liability, bring losses from earlier periods into the first tax year or manipulate reporting will not be accepted. The FTA has indicated it can disregard changes not made for genuine commercial reasons.
For instance, changing from a December year end to March after 1 June 2023 cannot extend your first tax period or alter its starting date if it appears intended to avoid or defer corporate tax. The FTA will look to the financial year used before 1 June 2023 as the reference point.
Multiple UAE entities with different financial years
Where multiple group companies operate under differing financial years, each company’s corporate tax period is determined independently, based on its own pre-existing accounting year. There is no requirement for group alignment unless you restructure for commercial purposes and the change is accepted by the FTA.
So, for a group with entities having March and June year ends, one may have its first tax period begin 1 April 2024 and the other 1 July 2023. Each files based on its own cycle.
Key point: first tax period is set by financial year start
Only the first full accounting year commencing on or after 1 June 2023 comes within the scope of UAE corporate tax. Pre-tax period profits remain untouched, and tax is not calculated on any part-year before your relevant financial year starts.
This mechanism avoids the need for pro-rated returns and allows small and mid-sized UAE businesses to continue their usual accounting routines without adopting a new year end solely for tax purposes.
