UAE Corporate Tax Return (CTGTXR1) Explained: A Complete Filing Guide for Businesses in 2025

Filing your first UAE Corporate Tax Return might feel overwhelming—especially when trying to understand the technical language on the official FTA site. That’s why we’ve broken down each part of the CTGTXR1 Tax Return form in simple terms, so you know exactly what to expect and how to prepare.

This guide is based on the FTA’s Corporate Tax Return Guide (CTGTXR1), released in November 2024 and still the main reference for tax filing in 2025. Here’s everything you need to know in clear, simple language. Federal Tax Authority (FTA) and includes all sections from Part A to Part I, with clear descriptions and helpful notes.

What is CTGTXR1?

CTGTXR1 is a step-by-step guide from the Federal Tax Authority (FTA) that explains how to fill out and submit your UAE Corporate Tax Return.

➡️ It is meant for any business or person who is required to file a corporate tax return in the UAE.
➡️ It is not a legal document, but it helps you follow the Corporate Tax Law correctly.

Tax Filing Deadline

Your Corporate Tax Return must be submitted within 9 months from the end of your Tax Period.

Example:
If your financial year ends on 31st Dec 2024, your return must be filed by 30th Sep 2025.

Where to File: EmaraTax

All returns are filed online through the EmaraTax portal. It’s a self-assessment system, meaning you are responsible for entering the correct info and calculating your tax.

What’s in the Tax Return?

Your tax return is made up of several parts. Here’s a breakdown:

1. Part A – Taxable Person Information
2. Part B – Elections (reliefs, exemptions, etc.)
3. Part C – Accounting Schedule
4. Part D – Adjustments and Exempt Income
5. Part E – Reliefs (group transfers, restructuring)
6. Part F – Other Adjustments (expenses, related party transactions)
7. Part G – Tax Calculation and Credits
8. Part H – Review and Declaration
9. Part I – Supporting Schedules

Who Needs to File?

Different categories of Taxable Persons must fill different details:

1. Natural Persons (individuals with business income)

• TRN required
• Turnover from business only (not employment, real estate, or personal investments)
• Choose accounting method: cash or accrual

2. Juridical Persons (companies and legal entities)

• Mention group membership (like MNE Group)
• Total revenue
• Type of business (government, extractive, etc.)
• Residency status based on incorporation or control

3. Free Zone Persons

• Are you claiming 0% tax as a Qualifying Free Zone Person?
• If you opt out, you lose 0% benefit for 5 years

4. Unincorporated Partnerships

• Must disclose members, revenue, and if treated as a separate Taxable Person

5. Tax Groups

• File consolidated financials
• Eliminate intra-group transactions

Part B – Elections

Here, you choose optional treatments or tax reliefs that apply to your situation. Some elections are one-time and permanent, others are yearly.

A tax election is a formal choice made by a business to apply specific tax treatments under the UAE Corporate Tax regime. Some elections are one-time and irrevocable, while others can be made annually. Once an election is made, it typically continues to apply in future tax periods unless otherwise specified.

Let’s explore the key elections and how they might impact your business:

1. Realisation Basis Election

If your business prepares Financial Statements using the Accrual Basis of Accounting, you may opt for the Realisation Basis for Corporate Tax purposes.

What does it do?
It allows you to disregard unrealised gains and losses—for instance, gains that appear in your books due to changes in asset values but haven’t actually been received. Instead, these are only taxed when a “realisation event” happens, such as:

• Selling the asset
• Settling the liability

Why it matters:
This election helps prevent paying tax on income you haven’t actually received yet. However, it’s typically a one-time, irrevocable decision that must be made in your first Tax Period.

2. Transitional Rules Election

When transitioning into the new Corporate Tax regime, you can elect to exclude certain gains or losses that relate to periods before your first Tax Period.

Eligible assets include:

• Qualifying Financial Assets
• Liabilities
• Immovable Property (e.g., real estate)
• Intangible Assets

Conditions to apply:

• Assets must be recorded on a historical cost basis
• You must use the Accrual Basis of Accounting (not available for Cash Basis users)

Why it matters:
This can help smooth the transition to Corporate Tax by avoiding tax on unrealised or historical adjustments. Like the Realisation Basis, this election is generally irrevocable and must be made in the first Tax Period.

3. Small Business Relief

This is one of the most powerful reliefs for eligible small businesses in the UAE.

Who can apply?

• Resident Persons (excluding members of MNE Groups and Qualifying Free Zone Persons)
• Annual Revenue of AED 3 million or less

What it does:
If elected, you’ll be treated as having no Taxable Income—even if your books show a profit.

Why it matters:
This is a simple way to avoid filing complex Corporate Tax returns if you meet the threshold. It’s an annual election, meaning you must opt in each year you qualify.

4. Transfers Within a Qualifying Group

If your business is part of a Qualifying Group, you can elect to transfer assets or liabilities between group members without triggering any Corporate Tax liability.

Key benefits:

• No gain or loss recognized on the transfer
• Applies to both tangible and intangible assets, as well as liabilities

Why it matters:
This supports internal restructuring, asset reallocation, or streamlining group operations—tax-free. It’s generally irrevocable and applies to all future group transfers once elected.

5. Business Restructuring Relief

If you’re reorganizing your business—whether merging departments, spinning off divisions, or transferring parts of your business to another entity—you may qualify for Business Restructuring Relief.

What’s covered?

• Transfers of an entire business
• Transfers of an independent part of a business

How it works:
You must elect relief for each qualifying transaction individually. If approved, no Corporate Tax arises from the restructuring itself.

Why it matters:
It ensures that necessary business changes, like mergers or splits, don’t create immediate tax consequences.

6. Foreign Permanent Establishment Exemption

If your UAE-based business has branches or operations abroad, this election can help avoid double taxation.

What it does:
You can elect—on an annual basis—to exclude income and expenses related to all qualifying Foreign Permanent Establishments from your UAE Corporate Tax calculation.

Conditions:

• The foreign branch must be subject to tax in its jurisdiction
• The foreign tax rate must be at least 9% (same as UAE Corporate Tax)

Why it matters:
It prevents being taxed twice on the same income—once abroad and again in the UAE.

Here’s a rewritten, SEO-optimized blog post version of the content from Parts C to I. The structure includes informative subheadings, bullet points for clarity, and user-friendly language while preserving technical accuracy.

Part C – Accounting Schedule

This section focuses on financial disclosures, not on calculating Taxable Income directly. You’re required to submit a breakdown of your Financial Statements, typically including:

• Income Statement
• Statement of Other Comprehensive Income
• Statement of Financial Position

Important Notes:

• Financial Statements must be prepared in line with IFRS, IFRS for SMEs, or Cash Basis of Accounting, depending on your business type.
• For Tax Groups, these are consolidated financials.
• If your annual revenue exceeds AED 50 million, or you are a Qualifying Free Zone Person, your Financial Statements must be audited.
• All figures must be reported in AED.

Part D – Accounting Adjustments & Exempt Income

This is a core calculation area, where you adjust your Accounting Income (net profit/loss from Financial Statements) to derive your Taxable Income.

Key Adjustments Include:

• Equity Method of Accounting: Remove share of earnings from investments not actually received as dividends.
• Unincorporated Partnership Adjustments: Disregard your share of income if the partnership is taxed separately.
• Unrealised/Realised Gains & Losses: Adjust for items reported in financials but not recognized in the income statement.
• Realisation Basis Adjustments: If elected, reverse unrealised gains/losses in financials and include previously deferred gains/losses once realised.
• Transitional Rules Adjustments: Exclude pre-first-tax-period gains/losses on qualifying assets when sold.
• Exempt Income:
  • Dividends from UAE Resident Persons (always exempt)
  • Participation Exemption for qualifying foreign income
  • Income from qualifying Foreign Permanent Establishments (if elected)
  • International Shipping/Aircraft Income (subject to conditions)

Part E – Tax Reliefs

This section allows you to apply Corporate Tax reliefs that can reduce your Taxable Income—particularly helpful for group structures and restructurings.

Key Relief Types:

1. Qualifying Group Relief:
   • Applies to transfers of assets/liabilities within a Qualifying Group.
   • No gain/loss arises at transfer.
   • Clawback provision: If the asset is transferred outside the group or the entity exits the group within 2 years, the gain/loss becomes taxable.
2. Business Restructuring Relief:
   • Applies to business transfers, whether an entire business or an independent part.
   • No gain/loss is recorded if criteria are met.
   • Clawback triggers include:
     • Sale of ownership interest
     • Disposal of transferred business within 2 years

Part F – Other Adjustments

This part addresses miscellaneous adjustments necessary to arrive at the correct Taxable Income figure.

Major Items to Adjust For:

• Non-Deductible Expenditures:
  • 50% of entertainment expenses
  • Certain pension contributions
  • Non-qualifying donations
  • Expenses related to Exempt Income
  • Dividends to owners, fines, bribes, non-business use expenses
  • Corporate Tax itself
• Interest Expense Limitations:
  • General Rule: Deductible Net Interest is capped at:
    • AED 12 million, or
    • 30% of adjusted EBITDA
    • Unused interest can be carried forward for 10 years.
  • Specific Rule: Disallows interest on related party loans used for non-business or capital-related purposes unless proven to lack tax avoidance motives.
• Related Parties & Connected Persons:
  • All high-value transactions must be at arm’s length.
  • Payments to Connected Persons (e.g., owners, managers) must be at market value.
• Qualifying Investment Funds:
  • Report your share of the fund’s income, classified by category (Exempt, Interest, Other).
• General Adjustments:
  • Correct minor historical errors (up to AED 10,000 tax impact).
  • Apply other necessary adjustments not covered elsewhere.

Part G – Tax Liability & Tax Credits

This is where everything comes together. Based on prior calculations and adjustments, your final tax position is determined.

Main Components:

• Taxable Income / Tax Loss: Auto-calculated after adjustments.
• Tax Loss Utilization:
  • Losses can offset up to 75% of future taxable income.
  • Can be transferred under certain conditions (especially within Tax Groups).
• Corporate Tax Liability:
  • 0% for the first AED 375,000
  • 9% on income above this threshold
  • Qualifying Free Zone Persons: 0% on Qualifying Income, 9% on other
• Tax Credits:
  • Foreign Tax Credits available for taxes paid abroad (limited to UAE tax due on that income).
  • Unused credits cannot be carried forward.
• Corporate Tax Payable = Liability − Credits
• Estimated Figures Disclosure:
  • Must declare any estimated amounts used due to incomplete financial data.

Part H – Review & Declaration

The final step before submission. The responsible party must formally declare the return’s accuracy and completeness.

Declaration Includes:

• Date of filing
• Who prepared the return:
  • The Taxable Person
  • A Tax Agent
  • A Legal Representative
  • An Authorized Partner (for Unincorporated Partnerships)
• Authorization confirmation
• Declaration of accuracy based on current knowledge

Part I – Schedules

Depending on your business type and elections made, you’ll need to complete only the schedules relevant to you.

Key Schedules:

• Free Zone Schedules: For verifying de minimis thresholds and substance requirements.
• UAE Dividends Schedule: To support exempt dividend income claims.
• Foreign Permanent Establishment Schedule: Needed if exemption was elected.
• Tax Credit Schedule: To document and claim foreign tax credits.
• Related Party & Connected Person Schedules: For high-value or non-arm’s-length transactions.
• Tax Loss Schedules: Track carry-forwards, utilization, transfers.
• Participation Exemption Schedule: Confirm qualification and income breakdown.
• Interest Capping Schedules: Document general limitation calculations and carry-forwards.
• Tax Relief Schedules: Required for group transfers and restructuring reliefs (plus clawback monitoring).
• Transitional Rule Schedules: Capture gains/losses on legacy assets upon realization.
• Other Schedules: Include unrealised gain/loss tracking, deferred items, and optional attachments.

Mandatory Documents to Attach

You must attach the following:

Financial Statements

• Required for all Taxable Persons, unless Small Business Relief is claimed
• Must follow IFRS, IFRS for SMEs, or Cash Basis
• For Tax Groups: use consolidated statements

Optional Documents (Keep Ready, Attach if Needed)

Even though these aren’t always mandatory to attach, you must keep them on record:

1. Proof of Market Value for financial assets at start of first Tax Period
2. Foreign Tax Residency Certificate (if you claim to be resident abroad)
3. Proof of Foreign Tax Paid (if claiming Foreign Tax Credit)

Summary: Filing Doesn’t Have to Be Hard

✅ CTGTXR1 is still the official guide in 2025
✅ Filing happens through EmaraTax
✅ First return is crucial – claim elections and reliefs wisely
✅ Know your category (Natural Person, Company, Free Zone, etc.)
✅ File before 9-month deadline from year-end
✅ Attach mandatory docs and keep supporting records for 7 years

Final Thoughts

Filing your UAE Corporate Tax Return is more than just submitting a single form it involves detailed financial disclosures, complex tax adjustments, and strategic elections. Each part of the return from financial reporting to final declaration plays a critical role in determining your tax liability and ensuring compliance with the FTA.

Pro Tip: Use the right accounting standards, track elections from your first Tax Period, and consult with a tax advisor for sections involving high-value transactions, international income, or Tax Group structures.

Need help filing your Corporate Tax Return or interpreting relief schedules?
Let us assist you with accurate, compliant, and strategic tax filing support tailored to your business structure.