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The Federal Tax Authority (FTA) has issued a reminder for businesses and certain exempt entities liable to Corporate Tax in the UAE to finalize their registration and submit their initial tax returns by Wednesday, July 31. This action is crucial to take advantage of the Penalty Waiver Initiative aimed at late registration.
Currently, over 33,900 registrants have availed themselves of this initiative, according to the FTA. The information, shared through a press release and reported by WAM, underscores the importance of prompt action via the EmaraTax digital platform to qualify for the penalty exemption.
This initiative is relevant to businesses whose first tax period corresponds to the calendar year, specifically from January 1 to December 31, 2024. To be eligible for the waiver, registrants must complete their Corporate Tax registration and submit their first Corporate Tax Return (or annual declaration for exempt entities) no later than seven months after their first financial year ends—by July 31, 2025, in most cases.
The FTA cautioned that failure to meet this deadline will automatically incur a late registration penalty of Dhs10,000.
Important Note: UAE has recently issued updates on depreciation rules concerning investment properties under the corporate tax law.
The FTA clarified that the penalty waiver is applicable solely to the initial tax period for a taxable or exempt entity and no separate request for penalty reconsideration is necessary. Should a penalty have already been settled, the Dhs10,000 will be credited automatically to the taxpayer’s Corporate Tax account in EmaraTax. This credit can be applied against future tax obligations or refunded by filing a refund application.
To assist taxpayers in understanding the eligibility criteria and procedural steps, the FTA has released a comprehensive public document. This resource outlines the conditions needed to benefit from the waiver, details the process for refunds of previously paid penalties, and provides various scenarios for clarity. The document can be accessed on the FTA’s official website under the title: Waiver of Administrative Penalty for Failure to File Corporate Tax Registration within the Prescribed Period.
The FTA urged all eligible entities to take swift action, emphasizing that prompt compliance not only helps avoid financial penalties but also contributes to the successful implementation of the UAE’s Corporate Tax system.