The Federal Tax Authority hosted a workshop in Abu Dhabi focused on the treatment of “family enterprises” under Federal Decree-Law No. 47 of 2022 concerning corporate tax, also known as the Corporate Tax Law. The workshop outlined the criteria required for classifying an entity as a family enterprise for the purposes of corporate tax.
In a press release yesterday, the authority noted that the workshop attracted significant interest, with 290 participants from the family enterprise sector, including officials from relevant government and private sector agencies.
The authority reiterated its call for those subject to corporate tax but not registered to promptly submit their registration applications to benefit from an initiative offering exemption from administrative fines for late registration requests during the legally defined period.
It was highlighted that the exceptional condition for qualifying for the exemption includes submitting the tax return or annual declaration within a maximum of 7 months from the end of the tax period. This applies solely to the first tax period for the taxpayer or exempt individual seeking registration, regardless of whether the due date for the initial tax return or annual declaration falls before or after the implementation of the new law.
Experts from the authority explained to participants the definition of a family enterprise according to the Corporate Tax Law and how these entities are treated for corporate tax purposes.
This year, the authority launched an application process via the “Emirates Tax” digital tax services platform, allowing eligible family enterprises to apply for treatment as joint alliances, provided they meet the specified criteria set forth in the Corporate Tax Law.
It was clarified that family enterprises wishing to apply for consideration as a joint alliance must have registered for corporate tax beforehand. The application can be submitted by the taxpayer, their tax agent, or legal representative. Upon approval, the family enterprise will not be required to submit annual corporate tax returns.
Additionally, individuals benefiting from the family enterprise must determine whether they are obligated to register for corporate tax and submit a tax return for the relevant tax period.