UAE Federal Tax Authority Waives Penalties for Late Corporate Tax Registrations Under New Cabinet Decision

The UAE’s Federal Tax Authority (FTA) has announced a new administrative exemption that will waive penalties for certain corporate taxpayers who missed the deadline to register for corporate tax, following a decision issued by the UAE Cabinet.

The exemption, revealed on May 7, aims to encourage greater voluntary compliance by reducing financial burdens on companies that missed registration deadlines but take swift corrective action. The FTA emphasized that this relief applies only to a company’s first tax period or financial year.

To qualify for the exemption, taxpayers must submit their tax return or annual declaration within seven months from the end of their first tax period—reduced from the previously allowed nine-month period, according to a report from the Emirates News Agency (WAM).

The FTA clarified that the exemption applies irrespective of whether the original registration deadline came before or after the Cabinet Decision. Furthermore, businesses that have already paid a late registration penalty but meet the updated conditions will be eligible for a refund, with the credited amount returned to their tax account.

Similarly, businesses penalized for submitting tax returns late during their first tax period—before the decision was issued—will also receive a refund if they meet the criteria outlined.

Khalid Ali Al Bustani, Director-General of the FTA, urged corporate entities that have not yet registered to act promptly. “Businesses must submit their registration applications and tax returns through the EmaraTax platform as soon as possible to benefit from this penalty waiver,” Al Bustani said. He reiterated that meeting the deadlines under the new decision is crucial for eligibility.

Al Bustani highlighted that more than 543,000 corporate tax registrations were recorded in the first quarter of 2025, reflecting a strong and growing compliance culture among businesses in the UAE. He noted that the FTA will continue to conduct awareness campaigns to support businesses in understanding and fulfilling their tax obligations.

Under the conditions of the waiver:

• Taxpayers who have registered and were penalized but haven’t paid must file within seven months to avoid paying the penalty.

• Those who paid penalties but meet the filing deadline will have the amount refunded.

• Taxpayers who have yet to register must both apply and file within the seven-month window to benefit.

The FTA stated that the initiative aligns with its broader strategy to streamline tax procedures, enhance transparency, and promote sustainable economic growth through voluntary compliance.