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The Federal Tax Authority (FTA) has emphasized the importance for businesses and specific exempt entities subject to Corporate Tax in the UAE to finalize their registration and submit their initial tax returns by Wednesday, July 31, in order to take advantage of the Penalty Waiver Initiative for late registration.
Currently, over 33,900 companies have utilized this initiative, as reported by the FTA. In a press release communicated through WAM, it was highlighted that prompt actions via the EmaraTax digital platform are crucial for qualification for the penalty exemption.
This initiative is relevant for companies whose first tax cycle aligns with the calendar year—from January 1 to December 31, 2024. To be eligible for the waiver, companies must complete their Corporate Tax registration and file their first Corporate Tax Return (or annual declaration for exempt entities) by July 31, 2025, which is seven months after the conclusion of their initial financial year.
The FTA has cautioned that missing this deadline will automatically incur a late registration penalty of Dhs10,000.
Additional Information: UAE has released a new decision regarding depreciation rules for investment properties within the corporate tax framework.
The FTA further clarified that the penalty waiver pertains solely to the initial tax period for a taxable or exempt entity, and no separate request for penalty reconsideration is required. If a penalty is already settled, the Dhs10,000 will be credited to the taxpayer’s Corporate Tax account in EmaraTax. This credit may be applied towards future tax obligations or reimbursed by filing a refund request.
To aid taxpayers in understanding the eligibility criteria and necessary procedures, the FTA has made a comprehensive public clarification document available. This document delineates the conditions for accessing the waiver, describes the refund process for previously incurred penalties, and provides various examples across different situations. It can be found on the FTA’s official site under the title: Waiver of Administrative Penalty for Failure to File Corporate Tax Registration within the Prescribed Period.
The FTA has urged all qualifying entities to act without delay, noting that early compliance will not only prevent financial penalties but also contribute to the successful implementation of the UAE’s Corporate Tax system.