Corporate Income Tax (CIT) is a tax that companies pay on the profit they make.
Companies earn money from their business.
They subtract business costs (like salaries, rent, and supplies).
The remaining money (profit) is taxed by the government.
It’s the government’s share of a company’s earnings.
- Activation of CIT Accounting
Administration → Settings: Taxes → Enable CIT Accounting.
2. New GL Accounts
Ensure that the correct GL accounts are available in the system.
Estimated CIT Liability - This GL can be used to record estimated income tax in the current period, which can later be offset against the actual tax payable. Works with Other Expenses and Tax Transactions documents.
Deferred Tax Asset - This is used when a company records tax losses that can be carried forward to offset future tax liabilities. It also works with Other Expenses documents to allow accrual of the loss now and deduction against taxes in later periods.
3. Set up the CIT return template
CIT Return templates are added to the master data of Taxes.
Taxes → Master Data → CIT Return Templates
There are two ways to prepare the template
Manual setup: Create the CIT return templates manually, build the structure, and link each line to data from your accounts.
Wizard: Use guided questions (recommended for the UAE) to prepare the template quickly. The CIT Wizard guides companies through essential questions to configure their UAE Corporate Income Tax return template. It adapts to each company’s chart of accounts and expense allocation rules, producing a return that closely matches the tax portal.
4. CIT Return
Once the CIT Return Template is set up, the system generates a return that looks almost the same as the UAE tax portal form. The amounts are taken directly from the company’s accounting data, so the return is accurate and consistent. At the end of the year, the user only needs to create the return, choose the period, and the system will calculate all amounts, including the tax liability. The process works in the same way as the VAT return.
Select the relevant period and the return template, then generate the CIT Return. The system automatically retrieves all necessary data from the accounting records and calculates all amounts, including the total tax liability.
Most amounts based on accounting data can be reviewed in detail. The system allows drill-down to analytics defined in the template and further to the transaction level for reconciliation using details option.
The CIT Return can be printed, and the printed document reflects the structure defined in the template, with all amounts populated automatically. This ensures that the printed version matches the system-generated return.
