The United Arab Emirates (UAE) has introduced a significant tax relief measure aimed at supporting businesses during the initial implementation phase of the Corporate Tax Law. On April 29, 2025, the UAE Cabinet, in collaboration with the Ministry of Finance (MoF) and the Federal Tax Authority (FTA), announced an initiative to waive the AED 10,000 administrative penalty for late corporate tax registration. This measure is designed to encourage timely compliance and alleviate financial burdens on businesses adapting to the new tax regime.
Key Provisions of the Penalty Waiver Initiative
- Eligibility Criteria:
- Taxable persons and exempt entities must submit their corporate tax return or annual declaration within seven (7) months from the end of their first tax period.
- Entities that have not yet registered for corporate tax are required to complete their registration and submit the necessary filings within the same seven-month timeframe to benefit from the waiver.
- Refund of Paid Penalties:
- Businesses that have already paid the AED 10,000 penalty for late registration and meet the above criteria are eligible to apply for a refund.
- Application Process:
- All registration, filing, and refund applications must be submitted through the EmaraTax platform.
Implications for Businesses:
This initiative underscores the UAE government’s commitment to facilitating a smooth transition into the corporate tax framework. By providing a grace period and financial relief, the authorities aim to promote voluntary compliance and reduce the administrative burden on businesses.
Action Required:
Businesses are advised to assess their tax registration status promptly and ensure that all required filings are completed within the stipulated seven-month period to take advantage of the penalty waiver.
For detailed information and to initiate the registration or refund process, please visit the Federal Tax Authority’s official website and FTA portal.
Note: This summary is based on the official announcement by the UAE Federal Tax Authority and is intended for informational purposes. Businesses should consult with tax professionals for personalized advice.
