UAE Corporate Tax Update: Advance Tax Payments Are Now Available
The Federal Tax Authority (FTA) in the UAE has introduced an Advance Payment Facility for Corporate Tax (CT), allowing businesses to proactively manage their tax liabilities. The option to pay Corporate Tax in advance is available to taxpayers starting from the 2026 fiscal year. Advance tax payments can be applied to future unpaid tax obligations or adjusted against the subsequent Corporate Tax return.
This facility enables businesses to make voluntary Corporate Tax payments before the final deadline, helping to avoid last-minute payment challenges, system errors, and reducing the risk of late payment penalties.
The Process (Allocation)
• Payment towards the next tax return: Advance payments are held on account until the next Corporate Tax return is filed.
• Adjustment: Once the return is processed, the prepaid amount is adjusted against the actual tax payable.
• Excess payment: If the advance payment exceeds the final tax liability, the excess amount is used to settle other outstanding or future liabilities on a first-in, first-out basis.
It is important to note that the standard deadline for filing Corporate Tax returns and paying the corresponding tax liability remains nine months after the end of the relevant tax period, even though advance payments are voluntary.
Disclaimer
This update is provided for information purposes only and does not constitute legal or tax advice. Businesses potentially affected by these changes should seek advice from qualified professionals or consult the Federal Tax Authority (FTA) for official guidance.
Contact Our Tax Department
If you have questions or require assistance regarding UAE Corporate Tax or VAT, our tax professionals are here to help.
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