Corporate taxpayers granted relief from late registration penalties by Financial Transaction and Assistance Center
The United Arab Emirates' Federal Tax Authority (FTA) has commenced the implementation of a new Cabinet Decision, offering relief to certain corporate taxpayers from administrative penalties related to late registration. This move is part of an extensive initiative to foster voluntary tax compliance and simplify the registration process.
To escape the administrative penalties, eligible corporate taxpayers must submit their first corporate tax return or annual declaration within seven months of the conclusion of their initial tax period or financial year—shorter than the previous nine-month window. This requirement is applicable regardless of whether the original deadline preceded or followed the decision's enactment.
The FTA has further clarified that those who have paid late submission penalties but meet the exemption criteria will receive refunds credited to their accounts. Similarly, taxpayers who filed returns prior to the decision's implementation and were penalized will also be reimbursed.
Khalid Ali Al Bustani, the Director-General of the FTA, has urged unregistered businesses to promptly register via EmaraTax and capitalize on this penalty waiver. He underscored the FTA's dedication to transparency and adaptability in light of evolving tax regulations, reiterating that compliance plays a crucial role in bolstering national economic growth.
As of Q1 2025, over 543,000 corporate tax registrations have been recorded, indicating increased business awareness. The FTA will persist in engaging with the private sector to offer guidance and tackle challenges in fulfilling tax obligations.
The exemption applies to all taxable entities, regardless of whether they have registered late, paid the penalty, or yet to register—provided they submit their tax returns within the stipulated seven-month window. Taxpayers are encouraged to examine the relevant laws and guidelines available on the FTA's official website.
For taxpayers during their first tax period, the penalty waiver pertains only to that period, irrespective of whether the original due date preceded or followed the implementation of the Cabinet Decision. Taxpayers who have already paid a penalty for late registration or the late submission but meet the exemption criteria will receive a refund.
- The new Cabinet Decision by the Federal Tax Authority (FTA) in the United Arab Emirates aims to simplify business policy-and-legislation, as it offers relief from administrative penalties for late registration to certain corporate taxpayers.
- In the realm of finance, the FTA has introduced a seven-month window for eligible corporate taxpayers to submit their first tax return or annual declaration without facing administrative penalties, an extension from the previous nine-month window.
- This initiative forms part of a broader Politics and general-news context, as the FTA's move is aimed at fostering voluntary tax compliance among businesses, contributing to economic growth.
