The CT will be applicable for financial years starting on or after 1 June 2023. Any company that adopts a fiscal year starting on 1 June 2023 and ending 31 May 2024  will be subject to CT starting 1 June 2023. The first tax return filing is likely to be due towards the end of 2024, any company that adopts a calendar year starting 1 January 2023 and ending 31 December 2023 will  be subject to CT starting 1 January 2024 and filing is likely to be due towards mid-2025.

Nonetheless, the Article 58 provides that the taxable person has a right to change the start and end date of its tax period or use a different tax period subject to receiving a prior permission from the FTA. By way of Decision No. 5 of 2023, the FTA has notified the conditions for change in Tax Period for the purposes of the CT law.

The request for change in tax period can be made only for one of the following reasons:

• Upon liquidation
• Aligning the financial year for following:

o    Formation of Tax Group

o    Joining an existing Tax Group

o    Aligning Financial reporting with Group companies

o    To avail specific tax relief under corporate tax Law in the UAE or foreign jurisdiction

• There is a valid commercial, economic, or legal reason to change the tax period.

Change in Tax Period can be requested for following:

o   Extend the current Tax Period – Up to maximum of 18 months

o   Shorten the next Tax Period – Between 6 to 12 months

Application for change of Tax Period

o   Time lines – Within 6 months from the end of the original tax period

o   Additional condition – Application can be made only if Tax Return has not been filed for the respective Tax Period

This decision will enable the taxable person, part of domestic or foreign groups, to align their tax period (extend or shorten) to avail benefits under the UAE CT Law like tax grouping, intra-group transfer of tax loss/ assets/liabilities or business restructuring relief. In due course it is expected that the FTA may issue separate decision or notification outlining the manner of the application for change of tax period to the Authority.