UAE Cabinet Decision No. 5 of 2023 under UAE Corporate Tax Law Outlining the Conditions for Change in Tax Period

The Federal Tax Authority issued decision No. 5 of 2023 on 07 April 2023 to outline the Conditions for Change in Tax Period.

If the below-mentioned conditions are satisfied, then the Taxable Person can only make an application to the Authority to change the start and end date of the Tax Period or to follow a new Tax Period.

Conditions: -

1.??????The change is for one of the following reasons:

a)??????Liquidation.

b)?????Aligning Financial Year with other person for the purpose of Tax Grouping

c)??????Aligning Financial Year with its domestic or foreign branch, parent, or subsidiary for the purpose of financial reporting or tax relief.

d)?????For valid commercial, economic, or legal reasons.

2.??????Tax Return for such Tax Period should not be filled.

3.??????The application for change in Tax Period should:

a)??????Extend the current Tax Period to be a maximum of 18 months; or

b)?????Shorten the next Tax Period to be between 6 and 12 months.

4.??????Such application must be made before six months from the end of the original tax period.

5.??????Prior or current Tax Periods are not allowed to shorten in this regard.

This new decision will provide clarity to Taxable Persons regarding their concerns related to changing their Tax Periods.