Key takeaways
- Changing a UAE company's financial year in its accounts does not by itself change its corporate tax period: the company must apply to the FTA under Article 58 of Federal Decree-Law No. 47 of 2022, and the FTA must approve the change.
- Under FTA Decision No. 5 of 2023, a UAE company can extend its current corporate tax period to a maximum of 18 months, or shorten its next corporate tax period to between 6 and 12 months, as of the decision text checked on 04 November 2026.
- A UAE company needs a valid reason to change its corporate tax period (liquidation, alignment with a group, parent or head office, or a commercial, economic or legal reason), and must apply before it files the return for the affected period and before 6 months pass from the end of the original period.
- UAE corporate tax is payable within nine months of the end of the tax period, so an approved change moves the payment date with it.
- A late UAE corporate tax return costs AED 500 per month or part of a month for the first twelve months and AED 1,000 per month after that (Cabinet Decision No. 75 of 2023, checked 04 November 2026).
Does changing my financial year change my corporate tax period?
No, not automatically. A UAE company's corporate tax period is its financial year, or part of it, and it moves only if the FTA approves an application under Article 58 of Federal Decree-Law No. 47 of 2022.
The FTA's Corporate Tax General Guide explains the default rule: for a company, the tax period is its financial year (the 12-month period for which it prepares financial statements) or part of that year. If a company prepares no financial statements, the tax period is the Gregorian calendar year, and for a natural person it is always the calendar year. Article 58 then lets a company ask the FTA to change the start and end dates of its tax period. The FTA guide notes this is mainly useful for groups that want to avoid keeping accounts on different periods.
So there are two separate steps: changing the year-end in your books and shareholder documents, and getting the FTA to change the tax period on your corporate tax registration. Doing only the first leaves your accounts and your tax registration on different dates.
What are the conditions for changing a tax period in the UAE?
A company can change its tax period only if it meets every condition in FTA Decision No. 5 of 2023, which took effect on 1 June 2023. The conditions below are from the decision's Article 2.
| Condition | What the decision says |
|---|---|
| Reason | One of: liquidation; aligning the financial year with a related resident person to form or join a tax group, or with a domestic or foreign head office, subsidiary, parent or ultimate parent, for financial reporting or to obtain a tax relief; or a valid commercial, economic or legal reason |
| Return status | The tax return for the affected tax period has not yet been filed |
| Extending | The current tax period can be extended to a maximum of 18 months |
| Shortening | The next tax period can be shortened to between 6 and 12 months; a shortening application cannot concern a prior or current tax period |
| Timing | The application is made before 6 months have passed from the end of the original tax period |
The decision names three kinds of reason, and "tax saving" is not one of them. A change that exists only to reduce or defer tax would be hard to fit into any of the three, so write the commercial or group reason down before you apply.
How do I apply to change my corporate tax period on EmaraTax?
You apply through your corporate tax registration on EmaraTax, and the FTA reviews the request before anything changes. The FTA's Change Corporate Tax Period user manual sets out these steps:
- Log in to EmaraTax with your credentials or UAE Pass.
- Select the taxable person and click "View".
- Under the Actions button ("..."), choose "Change Corporate Tax Period", read the instructions, tick the box and click "Start".
- In Request Details, enter the reason and details for the change and upload supporting documents that back up what you entered.
- Confirm the current corporate tax period, then pick the new period from the dropdown.
- In Review and Declaration, check everything, tick the declaration, click "Submit" and confirm.
- Note the reference number, and track the request under "View Application History".
If the FTA approves, you're notified by email, mobile and in My Correspondence, and the existing registration certificate is updated with the new tax period rather than replaced. The manual doesn't list the exact documents or say how long the FTA takes, so confirm both on the EmaraTax instructions page. Have a board or shareholder resolution and the evidence for your reason ready before you start.
What happens to my return and payment deadlines after a change?
Your deadlines follow the new tax period: corporate tax is payable within nine months from the end of the applicable tax period, per the FTA's Corporate Tax General Guide (Article 48 of the Corporate Tax Law). The table below shows how that works in two hypothetical cases.
| Hypothetical case | Resulting tax period | Payment due |
|---|---|---|
| Say a trading company with a 31 December year-end extends its current period to align with a foreign parent's 31 March year-end | 1 January 2026 to 31 March 2027 (15 months, inside the 18 month limit) | 31 December 2027 |
| Say the same company instead shortens its next period to reach a 30 June year-end | 1 January 2027 to 30 June 2027 (6 months, the minimum) | 31 March 2028 |
These are illustrations of the arithmetic, not a view that the FTA would approve either request. If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company.
Missing a deadline is expensive. These are the administrative penalties in Cabinet Decision No. 75 of 2023, as checked on 04 November 2026:
| Violation | Penalty |
|---|---|
| Late corporate tax return | AED 500 for each month or part of a month for the first twelve months; AED 1,000 for each month or part of a month from the thirteenth month |
| Late payment of corporate tax | A monthly penalty of 14% per annum on the unpaid tax, for each month or part of a month |
What happens to VAT, audits and free zone filings when the year-end changes?
The Article 58 change covers the corporate tax period only, so every other obligation runs on its own rules and needs its own check. VAT tax periods are set under the VAT rules, and audited financial statements are required by your free zone or licensing authority, which can differ between free zones and emirates.
Before you apply, ask your free zone or licensing authority whether a different year-end affects your licence renewal or audit filing dates.
18 months: the longest a company can extend its current corporate tax period under FTA Decision No. 5 of 2023. Source: FTA Decision No. 5 of 2023, Article 2, effective 1 June 2023, checked 04 November 2026.
What most guides don't tell you
- Timing guidance isn't consistent. The decision text says the application must be made before 6 months pass from the end of the original tax period, but some third-party guides describe a tighter window. Apply as early as you can rather than relying on the last day.
- A filed return closes the door. A change of tax period is only open while the return for the affected period hasn't been filed. If your accountant files early to be safe, the company loses the option to change that period.
- You can't shorten the past. Shortening applies only to the next tax period, so a company that wants a new year-end this year can't backdate it by shortening the current one. Extending the current period, up to 18 months, is the route for that.
- The FTA doesn't publish a decision timeline in its manual. Don't leave the application until the weeks before a return is due.
Which deadlines apply to your company?
An approved change of tax period moves your corporate tax dates, and a period that isn't 12 months long is easy to mis-calendar. The free UAE compliance calendar lists your company's tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file: get your free UAE compliance calendar
Frequently asked questions
Does the UAE have withholding tax?
The FTA's Corporate Tax General Guide says state sourced income earned by a non-resident and not attributable to a UAE permanent establishment is currently subject to a 0% withholding tax, under Article 45 of Federal Decree-Law No. 47 of 2022. The rate can change, so check the FTA's current guidance before relying on it.
How do I get a corporate tax deregistration done?
Corporate tax deregistration is a separate procedure with the FTA, defined in the FTA's Corporate Tax General Guide as the process by which a person is deregistered for corporate tax purposes. The conditions and timing depend on your circumstances, so confirm them with the FTA before you close or restructure the company.
Is director salary deductible for corporate tax in a UAE company?
Taxable income starts from the company's accounting income with adjustments, and the FTA guide uses market value, meaning an arm's length price, as the test for dealings with connected persons. Whether a particular director's salary is deductible depends on the facts, so get advice on your own numbers.
Can I claim expenses I paid personally for the business?
Record the payment in the company's books, for example as an amount owed back to you, and keep the supporting invoice, because taxable income starts from the company's accounting result. Whether a deduction is allowed turns on the deduction rules, so check specific items with an adviser.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- FTA Decision No. 5 of 2023 on the Conditions for Change in Tax Period
- FTA Corporate Tax General Guide (Articles 45, 48, 57 and 58 of Federal Decree-Law No. 47 of 2022 as cited in the guide)
- FTA Change Corporate Tax Period taxpayer user manual
- Cabinet Decision No. 75 of 2023 and its amendments on administrative penalties (Ministry of Finance)
Last checked: 04 November 2026
This is general information, not tax or legal advice for your specific situation.