The second Corporate Tax return is filed. For most businesses, the next one is being shaped now, in the decisions taken before 31 December 2026. A few lessons from the 2025 return deserve a place in this year's close.
Filing the 2025 return felt different from filing the first. The form had matured, the figures sat beside last year's, and several questions that were theoretical a year ago became practical. This is the first of three short pieces on what that experience means for the 2026 year-end. It covers the return itself, the financial statements behind it and the elections that shape it.
A return that now spans two years
For 2025 tax periods, the return shows the prior year's figures alongside the current ones. It also asks for ownership details, covering both immediate and ultimate shareholders. The return has become a record of the business over time, not a single snapshot.
Change from one year to the next is normal. A business that disallowed half of its entertainment expenditure in 2024, as Article 32 of the Corporate Tax Law requires, and reports no such adjustment in 2025 may have a perfectly good reason. What matters is knowing the reason and keeping it on file.
For the 2026 close, a short note explaining each material movement against 2025, written while the details are fresh, is worth more than any reconstruction after the event.
Ownership details that match the record
The ownership section rewards the same discipline. The shareholders reported should agree with the trade licence, the shareholder register and the beneficial ownership records. Changes during the year, such as a share transfer or a new holding company, should appear consistently in all of them.
The financial statements behind the return
Article 20 of the Corporate Tax Law starts the computation from standalone financial statements. Under Ministerial Decision No. 114 of 2023, those statements follow IFRS, and a business with Revenue of AED 50 million or less may use IFRS for SMEs. Management-approved accounts are acceptable where no audit is required, but they still need to meet the applicable standard.
For tax periods starting on or after 1 January 2025, Ministerial Decision No. 84 of 2025 sets out who must prepare audited financial statements. The list includes a Taxable Person with Revenue above AED 50 million, a Qualifying Free Zone Person and a Tax Group.
Elections that last
Some choices made in a return carry forward. Under Article 20(3), a business may elect to recognise certain gains and losses on a realisation basis. Building on that election, Ministerial Decision No. 173 of 2025 allows a tax depreciation deduction for investment property held at fair value, generally the lower of 4% of original cost and the tax written-down value.
The election is irrevocable and covers all investment property held at fair value. It is made in the return for the first tax period beginning on or after 1 January 2025 in which investment property is held – for calendar-year businesses, the return just filed. Businesses holding such property should confirm that the position taken in 2025 is the one they intend to carry forward.
Registration details that reflect the business
Registration data is easy to set and forget. A new branch, licence or trade name should be reflected in the Corporate Tax registration. Branches of the same legal person sit under one registration, and the record should list each of them, including a branch that has not yet earned revenue. We have seen an amended certificate issued simply to add a second branch that the first version did not show.
Correcting what a review finds
A post-filing review will occasionally find something to adjust. The tax procedures framework offers two routes: some smaller differences may be corrected in a subsequent return, and others through a voluntary disclosure. Which route applies depends on the nature and size of the difference under the rules in force, and it is best settled before the next return is prepared.
Into the 2026 close
The 2026 year-end is the first that most businesses approach with two filed returns behind them. The lessons are practical: explain movements, keep ownership and registration data aligned, settle the financial statement framework early and treat elections as long-term decisions.
For businesses in the first phase of UAE e-invoicing, which goes live on 1 January 2027, this is also the last year-end before that change – one more reason to begin 2027 with clean data. Parts two and three turn to related parties and transfer pricing, and to the revenue tests behind Small Business Relief and Qualifying Free Zone Person status.