The Federal Tax Authority (FTA) has announced the implementation of a new Cabinet Decision that provides relief for businesses that were late in registering for Corporate Tax. This initiative reflects the UAE’s commitment to supporting businesses, encouraging voluntary compliance, and reducing the financial burden on companies adapting to the new Corporate Tax system.
What does the decision mean?
Businesses that failed to register for Corporate Tax within the legal deadline will now be exempt from late registration penalties, provided they meet certain conditions. The key condition is that the taxpayer (or exempt person required to register) must file their first Corporate Tax Return (or annual declaration) within 7 months from the end of their first tax period — instead of the usual 9 months.
This exemption applies only to the first tax period for which the Corporate Tax Return is due.
Refund of penalties already paid
If a company has already paid a penalty for late registration but meets the conditions for the exemption, the amount paid will be credited back to the company’s FTA account. Similarly, if penalties were imposed before the exemption decision came into effect, they will be refunded to eligible businesses.
Why is this important?
Encourages compliance: Businesses are given an extra chance to align with Corporate Tax regulations without immediate financial penalties.
Financial relief: Companies that have already paid penalties can recover those amounts.
Transparency: Reinforces the UAE’s approach to building a flexible, business-friendly tax environment.
Next steps for businesses
If you are not yet registered for Corporate Tax, submit your registration immediately via EmaraTax.
Prepare to file your first Corporate Tax Return within 7 months of your first financial year-end.
Keep accurate financial records to avoid future non-compliance.
How I can help
As a UAE-based accountant, I support businesses with:
Corporate Tax registration with the FTA.
Preparation and filing of Corporate Tax Returns.
Advisory on compliance with UAE tax regulations.
📌 Staying up to date with FTA announcements is essential. This latest exemption is a valuable opportunity for businesses to catch up with Corporate Tax compliance without incurring extra costs.