Here’s What It Means for Your Business and What You Need to Do Now
In a move that signals strong support for businesses adapting to the UAE’s newly introduced Corporate Tax regime, the Ministry of Finance and the Federal Tax Authority (FTA) have announced a waiver of the AED 10,000 penalty for businesses and exempt persons who failed to register for corporate tax on time.
This initiative soon to be formalized via an official Cabinet Decision aims to ease the financial burden, support smoother compliance, and offer flexibility during the first year of implementation.
Who Is Eligible for the Penalty Waiver?
To qualify for the waiver, companies (including qualifying exempt entities) must:
- File their Corporate Tax Return or annual financial statements
- Within 7 months from the end of their first tax period
For example:
If your financial year ends on 31st December 2024, you must file your tax return on or before 31st July 2025 to qualify for the penalty waiver.
What If You’ve Already Paid the Penalty?
The FTA has confirmed that refunds will be processed for those who’ve already paid the AED 10,000 fine-provided they meet the eligibility criteria.
Why This Matters for Your Business
This penalty waiver isn’t just a short-term relief-it’s a strategic support measure that:
- Encourages proper tax compliance
- Reduces transitional hurdles
- Lowers financial stress for newly liable entities
- Reflects the government’s commitment to economic sustainability
Recommended Next Steps by Percept
At Percept, we recommend taking immediate action:
- Review your corporate tax registration status today
- If not registered, begin the process without delay
- Ensure timely filing of your Corporate Tax Return within the 7-month post-period window
Need Help Navigating Corporate Tax Compliance?
Understanding UAE’s corporate tax regulations and deadlines can be complex, but you don’t have to go it alone.
Book a FREE consultation with our tax experts today to ensure you’re compliant, protected, and prepared.
