UAE Corporate Tax: How to get your Corporate Tax Penalty waived
In a welcome move for businesses across the UAE, the Federal Tax Authority (FTA) has introduced a new initiative allowing companies to waive off the AED 10,000 late registration Corporate Tax Penalty under the corporate tax regime. This waiver, announced in April 2025, is designed to support compliance and ease the transition into the new tax framework.
To qualify for the waiver, businesses must meet specific conditions:
- Already Registered but Penalty Unpaid: If your company is registered but hasn’t paid the corporate tax penalty, you can waive it off by filing your corporate tax return within seven months of the end of your first tax period. For example, if your tax period ends on December 31, 2024, you must file by July 31, 2025.
- Already Registered and Penalty Paid: Even if you’ve already paid the corporate tax penalty for late registration, you can still get a waiver and refund for paid amount provided you file your return within the same seven-month window.
- Not Yet Registered: Businesses that are obliged by law to register for corporate tax but still haven’t registered must do so immediately and file their return within seven months of their first tax period to benefit from the waiver.
Please note: Once they do the registration process then late registration corporate tax penalty will be immediately applied by Federal Tax Authority. And after that if they file their corporate tax returns within seven month of their first tax period then they become eligible for waiver of corporate tax penalty.
It’s important to note that filing after the seven-month window (but before the legal nine-months deadline) will still be accepted, but the waiver will not apply.
This initiative reflects the FTA’s commitment to encouraging timely compliance while offering relief to businesses navigating the new tax landscape. Finance leaders should act promptly to ensure eligibility and avoid unnecessary penalties.
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