With the UAE’s federal corporate tax now in effect for financial years starting on or after 1 June 2023, businesses across the Emirates are entering a new era of fiscal responsibility. As companies adapt to this evolving taxation system, public clarifications issued by the Federal Tax Authority (FTA) have become essential tools for understanding how the law is interpreted and ensuring full compliance.
This guide explains what public clarifications are, highlights key updates issued by the FTA, and outlines practical steps businesses can take to remain compliant under the UAE’s Corporate Tax Law.
What Are Public Clarifications Under UAE Corporate Tax?
Public clarifications are official documents issued by the Federal Tax Authority to provide interpretive guidance on complex or ambiguous areas of the Corporate Tax Law. They are designed to help businesses understand how specific provisions are applied in practice, reducing uncertainty and improving compliance.
While public clarifications are not legally binding, they serve as valuable references for taxpayers and advisors when assessing their tax obligations.
There are two main types of clarifications
- Public Clarifications : These provide general guidance applicable to all taxpayers and cover commonly encountered tax issues.
- Private Clarifications : These are case-specific responses issued by the FTA to address queries from individual taxpayers regarding their unique circumstances.
The issuance and scope of such clarifications are governed by formal decisions, such as FTA Decision No. 4 of 2024, which defines the procedures and limitations for both public and private clarifications.
Key Public Clarifications to Know
1. CTP001 – Registration Timelines
This clarification explains when a taxable person must register for corporate tax under FTA Decision No. 3 of 2024. Registration deadlines are based on the date of business license issuance or the start of the financial year. Failure to register within the prescribed timeframe can result in a penalty of AED 10,000.
2. First Tax Period and Initial Filing Clarification
This clarification helps businesses determine their first tax period, especially for companies with non-standard financial years. Ministerial Decision No. 120 of 2023 (MoF) sets out the transitional rules (adjustments to opening tax bases and treatment of disposals) for the introduction of corporate tax; FTA Decision No. 3 of 2024 prescribes registration timelines (deadlines based on licence issue date or financial-year start); and FTA Decision No. 7 of 2024 postponed the filing and payment deadline to 31 December 2024 for taxpayers with short tax periods ending on or before 29 February 2024, providing clarity around the UAE CT Filing Deadline and the applicable UAE Corporate Tax Filing Deadline.
3. Other Recent Clarifications
Several other important clarifications have been released by the FTA, including:
| Clarification | Summary |
|---|---|
| CTP006 – Waiver of Late-Registration Penalty (issued July 2025) | Implements Cabinet Decision No. 75 of 2023 (waiver effective 14 Apr 2025) for AED 10,000 penalties incurred since 1 Jun 2023. Waiver applies if the first CT return or annual declaration is submitted within 7 months of the tax period end. Refund or credit available for paid penalties |
| CTP007 – Financial Statements & Audit (Aug–Sep 2025) | Tax groups must prepare and submit audited Aggregated Financial Statements (AFS) for tax periods starting on or after 1 Jan 2025, regardless of revenue. AFS must comply with IAS 1 and be audited under International Standards on Auditing (ISA) for special-purpose frameworks |
| Free Zone Clarifications | FTA has issued clarifications on Free Zone Persons covering qualifying income, de-minimis limits, and tax group eligibility. Free Zone entities must maintain separate accounts to retain the 0% corporate tax rate benefits |
| Private Clarification Rules | Outline procedures for requesting case-specific clarifications from the FTA |
| CTP008 & CTP009 (Sept 2025) | Clarify treatment of Family Foundations and valuation of assets under transitional rules. Relevant to family offices, holding structures, and real estate developers. |
Key Deadlines for 2025
Businesses should take note of several important compliance dates under the corporate tax regime:
| Date | Requirement |
| 31 March 2025 | Natural persons with turnover exceeding AED 1 million in 2024 must register for Corporate Tax, and may benefit from professional Corporate tax registration services in UAE to ensure compliance |
| 30 September 2025 | Filing deadline for entities with financial year ending 31 December 2024 |
| 31 December 2025 | Deadline to elect Corporate Tax treatment for unincorporated partnerships |
Timely compliance with these deadlines is essential to avoid financial penalties and ensure uninterrupted business operations.
Compliance Steps Based on Clarifications
To ensure compliance with UAE Corporate Tax Law and related clarifications, businesses should take the following actions:
- Assess Applicability : Evaluate how each clarification applies to your business structure, operations, and tax status—particularly for registration, free zone eligibility, or tax grouping.
- Register on Time : Submit your corporate tax registration services in UAE within the clarified deadlines to prevent fines or administrative delays.
- Align Accounting and Reporting : Maintain consistent accounting policies and prepare audited financial statements if required by law or FTA clarifications.
- Maintain Documentation : Keep all supporting documents and tax records for at least seven years as required under the Corporate Tax Law.
- Monitor Regulatory Updates : Regularly review the FTA website, especially the “Guides, References, and Public Clarifications” section, for new releases or amendments.
- Seek Private Clarification : If your business faces unique tax situations or unresolved issues, apply for a private clarification through the FTA’s official channels.
- Verify eligibility for CTP006 waiver if registration was delayed: prepare audited Aggregated Financial Statements (AFS) if part of a Tax Group, in line with CTP007.
| Challenge / Risk | Best Practices |
|---|---|
| Over-reliance on non-binding clarifications | Use clarifications as guidance, not substitutes for legal advice |
| Ambiguity in interpretation | Consult tax advisors to interpret grey areas |
| Frequent updates | Maintain a compliance calendar and assign internal responsibilities |
| Documentation gaps | Implement robust record-keeping and audit trails |
Conclusion
Public clarifications play a vital role in the UAE’s corporate tax framework. They provide transparency, consistency, and confidence to businesses operating under the new tax regime. By understanding these clarifications and implementing the corresponding compliance steps, companies can minimize their risk of non-compliance, avoid penalties, and strengthen their overall tax governance.
As the UAE corporate tax environment continues to evolve, staying informed through official FTA updates and professional guidance from trusted firms like Reyson Badger will remain essential for all businesses seeking sustainable and compliant operations in the Emirates.
