Ministerial Decision No, 5 of 2023 on Conditions for Change in Tax Period
Ministry of Finance has issued Ministerial Decision No, 5 of 2023 on Conditions for Change in Tax Period for the purposes of the Federal Decree Law No. 47 of 2022 on Taxation of Corporations and Businesses (“CT law”).
Below are the key highlights of the decision-
1. Conditions for change in Tax Period :
A Taxable Person can make an application to the authority to change the start and end date of the Tax Period, or use a different Tax Period, subjected to meeting the following conditions :
- Liquidation of taxable person.
- To align the resident taxable person financial year with the financial year of another resident person for the purpose of forming the tax Group or joining an existing tax group.
- To align the taxable person’s financial year with the financial year of its domestic or foreign head office, subsidiary, parent for the purpose of financial reporting or to benefit from a tax relief.
- If there is valid commercial, economic, or legal reason to change the tax period.
- Taxable person has not yet filed the tax return for the tax period he is applying to change.
- The application for change in tax period is either to extend the current tax Period to be a maximum of 18 months or to shorten the next tax period to be between 6 and 12 months.
2. Time limit to apply for change in Tax period:
The application shall be made within 6 months from the end of the original Tax Period.
3. Application to shorten a Tax Period :
If the taxable Person files an application to shorten a tax period, the application shall not be in respect of a prior or current tax period.