The UAE Ministry of Finance and the Federal Tax Authority have announced a new initiative to waive penalties for businesses that missed the deadline to register for Corporate tax (CT).
To qualify for the waiver of penalty, the eligible businesses needs to file their CT returns or annual statements within seven months from the end of their first tax period. In case the business has already paid the penalty (generally AED 10,000), the same would be refunded by the FTA.
For example, if a company with a taxable period January to December 2024, submits its CT return by 31 July 2025, any penalty levied on the company for delay in applying for CT registration would be waived/ refunded (if already paid).
The waiver scheme intends to promote early compliance, reduce financial burden on businesses and ease the transition into the newly implemented corporate tax regime. A Cabinet Decision is likely to be issued shortly on this.
It is imperative for the businesses to take advantage of this scheme and consider submitting the CT return within 7 months from the end of tax period, in case there has been a delay in applying for the CT registration.