FTA Launches Penalty Waiver for Late Corporate Tax Registration in the UAE

The companies that were not able to register for corporate tax within the required timeline will not be fined due to the temporary penalty waiver program initiated by the Federal Tax Authority (FTA) in the United Arab Emirates. It is beneficial for those companies that meet certain criteria and file the required documents within the time provided. These companies qualify to this waiver. This step brings benefits to businesses in the UAE by providing them with an opportunity to correct their overlooked corporate tax registration without becoming subject to any penalty. It also assists them in complying with new tax regulations as well as brings pressure on them to submit their tax returns on time.

Who Can Benefit from this Waiver?

The waiver is available for two main groups:

  • Businesses that registered late and received a penalty.
  • Businesses that haven’t registered yet and are worried about getting penalized.

In both situations, the company needs to file its tax return within 7 months after its first tax period ends to be eligible for the waiver.

Conditions to Qualify

To benefit from the waiver:

  • The tax return must be filed no later than 7 months after the first tax year finishes.
  • Even if a business doesn’t have to pay corporate tax, it still needs to submit the yearly tax return within the same 7-month deadline.

Scenarios of Waiver Application

Scenario 1:

The business received a penalty for submitting its tax registration after the deadline, but it hasn’t paid it yet. The penalty will be waived if the annual declaration or tax return is filed within the 7 months window.

Scenario 2:

The fine for late registration has already been paid. If the company submits the required filings within 7 months, the penalty paid already will be credited back to their Emara Tax account.

Scenario 3:

The company hasn’t registered at all. If it registers and submits its tax return or declaration within 7 months of the first tax period, it will also be eligible for the waiver.

What to Do Now

Businesses are urged to take advantage of this opportunity by:

  • Registering for corporate tax (if not done yet).
  • Timely filing of the tax returns or yearly declarations.

All submissions should be made through the EmaraTax platform.

Read More: Corporate Tax News and Updates in the UAE