The UAE Ministry of Finance (MoF), in consultation with the Federal Tax Authority (FTA), has issued a significant compliance relief measure in the form of an administrative penalty waiver for businesses and entities that failed to register for Corporate Tax by the required deadline. However, this waiver is conditional—it is only available to registrants who file their tax return or annual statement within seven months from the end of their first tax period.
This initiative reflects the UAE’s commitment to supporting businesses during the first year of the Corporate Tax regime and to encouraging voluntary compliance.
Conditions to Qualify for the Penalty Waiver
To benefit from the waiver, both of the following criteria must be met:
- The entity was subject to an administrative penalty for late registration under the UAE Corporate Tax Law;
- The entity must file its Corporate Tax return (or annual statement, if exempt) within seven months from the end of its first tax period.
If these two conditions are satisfied, any administrative penalties previously imposed will be automatically waived or refunded, with no separate application required.
Illustrative Example
Company A was required to register for Corporate Tax by 31 October 2024 but failed to do so and was subsequently imposed a late registration penalty of AED 10,000. The company’s first tax period ends on 31 December 2024.
Under the waiver initiative, Company A must file its corporate tax return no later than 31 July 2025 (i.e., seven months from 31 December 2024).
If Company A completes its tax return filing on or before 31 July 2025, the late registration penalty will be automatically cancelled or refunded, even though it was previously imposed.
However, if the return is filed after 31 July 2025, the penalty will remain payable and enforceable.
Key Takeaways
This is not a blanket waiver. Penalties will only be waived for entities that comply with the return filing deadline linked to their first tax period.
No manual refund request is needed. The FTA will process qualifying refunds or waivers automatically.
Businesses that were unaware or delayed in registration now have a final opportunity to become compliant without financial penalty, provided they act within the prescribed timeframe.
Our Advisory
We advise all affected businesses to:
- Determine the end date of their first tax period;
- Calculate the seven-month return filing deadline;
- Complete and submit the corporate tax return before this date to ensure eligibility for the penalty waiver.
For professional assistance with registration, return preparation, or compliance strategy, please contact our UAE Tax Advisory Team.