UAE corporate tax penalty waiver may benefit 91,000 businesses

Dubai: The UAE’s Federal Tax Authority expects more than 91,000 taxable persons to benefit from the Corporate Tax Late Registration Penalty Waiver initiative, as it urged unregistered businesses to apply and complete their first filing within the required timeline.

The FTA said more than 68,600 taxable persons had already benefited from the waiver during 2025 and the elapsed period of 2026. Another 22,000 taxable persons are eligible to benefit in the coming period, provided they meet the conditions set under the Cabinet decision.

The initiative, which came into effect in April 2025, applies to late corporate tax registration penalties from June 1, 2023, subject to the required conditions.

The waiver applies to taxable persons for corporate tax purposes and certain exempt persons who are required to register with the FTA but submitted their registration applications late.

To qualify, the taxable person or exempt person must submit the tax return or annual declaration within seven months from the end of the first tax period or first financial year. This is shorter than the usual nine-month period.

The FTA said the initiative applies only to the first tax period of the taxable person or exempt person required to register.

Abdulaziz Al Mulla, Director General of the FTA, urged unregistered corporate taxpayers to use the initiative while they remain eligible.

“The FTA is intensifying its efforts to support and assist Taxable Persons, providing continuous facilitations that enable them to fulfil their tax obligations, thereby enhancing the UAE’s competitiveness in the field of doing business,” Al Mulla said.

“The Authority is also committed to enhancing proactive and continuous awareness of all applicable and newly introduced tax legislation, decisions, and procedures, as well as procedural facilitations to ensure smooth and seamless tax compliance.”

The authority said the initiative is part of wider efforts to encourage voluntary compliance while maintaining a flexible tax environment for businesses.

Al Mulla said FTA database indicators show that more than 22,000 taxable persons can still benefit from the waiver.

“In accordance with the esteemed Cabinet Decision, the initiative covers Corporate Taxable Persons and certain categories of Exempt Persons required to register with the FTA, who were late in submitting their tax registration applications within the specified timeline and consequently incurred administrative penalties,” he said.

“These categories can benefit from the initiative by submitting Corporate Tax registration applications, followed by Tax Returns or Annual Declarations through the EmaraTax digital tax services platform, within seven months from the end of the first Tax Period or Financial Year.”

The FTA said eligible taxpayers do not need to submit a separate reconsideration or waiver request.

Once the taxpayer meets the exemption conditions by submitting the tax return or annual declaration within the seven-month period, the late registration penalty will be waived automatically.

Taxpayers who have already paid the late registration penalty will receive an automatic credit equal to the penalty amount on their EmaraTax account. That amount can be used to settle other tax liabilities or claimed through a refund application.

The waiver covers taxpayers who registered late and were charged a penalty, whether the penalty has been paid or remains unpaid.

It also covers those who have registered but have not yet submitted the tax return, along with persons who have not registered but complete registration and submit the required return or annual declaration within the specified period.

In each case, the penalty will either be cancelled or refunded, depending on the taxpayer’s status.

Businesses that missed their corporate tax registration deadline should check whether they fall within the first tax period covered by the initiative and submit their registration through EmaraTax.

The FTA has also asked concerned parties to review its public clarification on the waiver, which explains eligibility conditions, refund mechanisms and examples covering different taxpayer situations.