UAE corporate tax: Companies start to get refunds for missing this deadline

Dubai: There is good news for UAE companies that failed to register corporate tax by their deadlines and got a fine for that – because they are starting to get those refunds. Back into their tax accounts.

In May, the FTA (Federal Tax Authority) said penalties for late corporate tax registration will be automatically waived - or refunded - if the business submits the tax returns within 7 months from the end of their first tax period.

In cases where the penalty has already been paid, the amount will be refunded to the taxpayer’s tax account. If the penalty was issued but not yet paid, it will be automatically waived in the system.

The late tax registration fine is Dh10,000. Now, those fines that were imposed are being returned.

“Where the penalty has already been paid, the amount will be refunded to that business’s tax account,” said Sumayya Zain, founder-CEO at Dubai-based Hallmark International Auditors.

As for companies that had received the fines, the refunds will be particularly helpful, especially among the SMEs, ‘where every dirham saved comes in handy’, according to one business owner. “Our auditor has confirmed that refunds on the late registration penalty will happen soon.”

Now, the FTA had made it clear that it’s not enough if a UAE business turns up to register at the time of their choosing to qualify for a refund.

Penalties for late corporate tax registration will be automatically waived - or refunded - if the business submits their corporate tax return within 7 months from the end of their first tax period.

“So, if a company’s first tax period is from 1 January to 31 December 2024, they must file the return by 31 July 2025,” said Sumayya. “Filing within this deadline ensures the penalty is either waived or refunded.”

For other companies that have the January to December 2024 as financial year, they need to submit tax returns in 9 months, which is September of 2025.

The relief also applies to UAE companies with earlier tax periods— for instance, those with a financial year running from July 1, 2023 to June 30, 2024. But ‘provided the return had been submitted within the 7-month window’, said Sumayya.

The refunds are directed to the tax account that a business must create through the EmaraTax portal from the FTA. All aspects of the tax registration and tax filings are routed through this, and this is also where the refunds on those paid late registration fines are refunded.