The first financial year under the Commercial Companies Law may not necessarily be a 12- month period, but instead can be a period between 6 months and 18 months. Where the first tax period of such taxable person is not a 12-month period but a period between 6 months and 18 months, the taxable person is not required to make any application to the FTA to change its tax period. In such a case, there is no pro-rating of the various thresholds prescribed under the Corporate Tax Law, e.g. the revenue threshold for Small Business Relief, except for the de minimis threshold for the purposes of the General Interest Deduction Limitation Rule.
This applies to Commercial companies established in the UAE (including a Joint Liability Company, Limited Partnership Company, Limited Liability Company, Public Joint Stock Company, Private Joint Stock Company), foreign incorporated companies that establish their head office or a branch or representative office in the UAE, as well as juridical persons formed under Free Zone regulations, which nonetheless have the same requirements for the first financial year as the Commercial Companies Law.
The Public Clarification also addresses the timeline for tax deregistration in case of the cessation of business or business activities before or during the first tax period.
