FTA Urges Companies to File Tax Returns by July 31 to Avoid Dhs10,000 Penalty

The UAE’s Federal Tax Authority (FTA) has issued a final reminder for companies and certain exempt entities to register and file their first Corporate Tax returns by Wednesday, July 31, in order to qualify for a penalty waiver under the current initiative.

In a statement released through the Emirates News Agency (WAM), the FTA said that over 33,900 taxpayers have already taken advantage of the Penalty Waiver Initiative, which is part of the government’s efforts to encourage early compliance with the new Corporate Tax regime.

The waiver is applicable to businesses whose financial year aligns with the calendar year—from January 1 to December 31, 2024. These businesses must complete both registration and submission of their first tax return or annual declaration (in the case of exempt persons) within seven months of the end of the first financial year. For most, this deadline falls on July 31, 2025.

Entities failing to meet this deadline will face an automatic late registration penalty of Dhs10,000, the FTA warned.

The tax authority clarified that the waiver is only valid for the first tax period of either taxable or exempt entities. No separate application is required to benefit from the exemption. If a penalty has already been paid, the amount will be automatically credited to the taxpayer’s EmaraTax account and can be used to offset future liabilities or refunded upon request.

To support taxpayers, the FTA has published a detailed public clarification document. This resource outlines who qualifies for the waiver, how previously paid penalties can be refunded, and includes real-life examples to guide businesses through different scenarios.

The FTA stressed that timely compliance not only prevents financial penalties but also contributes to the smoother implementation of the UAE’s Corporate Tax framework. The authority encouraged businesses to use the EmaraTax platform to complete their registration and file returns promptly.

The Corporate Tax law, introduced as part of the UAE’s wider efforts to align with international tax standards and diversify government revenue streams, applies to most businesses operating in the country. However, certain categories such as government entities, public benefit organisations, and qualifying free zone persons may be exempt under specific conditions.

With the July 31 deadline fast approaching, the FTA reiterated the importance of early action and full compliance, warning that failure to act in time will result in avoidable penalties.