Pursuant to Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, Cabinet Decision No. 75 of 2023 on Administrative Penalties, and the Federal Tax Authority’s Corporate Tax Public Clarification CTP006 concerning the waiver of late registration administrative penalties, the Federal Tax Authority (FTA) has confirmed a significant increase in the number of taxpayers expected to benefit from the Corporate Tax Late Registration Penalty Waiver Initiative.
The FTA recently announced that the number of expected beneficiaries under the initiative is projected to rise to approximately 91,000 taxpayers, reflecting continued efforts by the UAE authorities to encourage voluntary tax compliance and facilitate the transition into the UAE Corporate Tax regime.
Overview of the Initiative
For assistance regarding UAE Corporate Tax compliance, registration obligations, or penalty waiver eligibility assessments, AZ Advisory Services is available to support your business with tailored tax advisory and compliance solutions.
The waiver initiative provides eligible taxpayers with relief from the AED 10,000 administrative penalty imposed for failure to submit a Corporate Tax registration application within the prescribed deadline. Under the initiative, eligible taxable persons may obtain:
- Waiver of unpaid penalties, or
- Refund/credit of penalties already settled, subject to compliance with the conditions prescribed by the FTA.
The initiative forms part of the UAE’s broader compliance-driven approach aimed at supporting businesses during the implementation phase of the Corporate Tax framework.
Who May Benefit from the Initiative
1. LATE-REGISTERED BUSINESSES WITH UNPAID PENALTIES
-> Penalty may be waived if the Corporate Tax Return is filed within 7 months.
2. LATE-REGISTERED BUSINESSES THAT ALREADY PAID PENALTIES
-> May receive a refund or credit to their EmaraTax account if conditions are met.
3. UNREGISTERED BUSINESSES
-> May still qualify if they complete registration and filing within the required timeframe.
4. CERTAIN EXEMPT ENTITIES
-> If they submit the required annual declaration on time.
Key Eligibility Conditions
Based on the FTA Public Clarification CTP006, taxpayers may qualify for the waiver provided that they:
- Complete their Corporate Tax registration with the FTA;
- Submit the required Corporate Tax Return or Annual Declaration; and
- Ensure filing is completed within seven (7) months from the end of the first Tax Period or first Financial Year, as applicable.
Where the conditions are satisfied, the administrative penalty may be automatically waived or credited to the taxpayer’s EmaraTax account in accordance with FTA procedures.
