Dubai: In a welcome move for businesses, the UAE has announced it will waive administrative penalties for late corporate tax registration. Even more significantly, companies that have already paid fines for missing registration deadlines—amounting to AED 10,000 per entity—will now be eligible for refunds.
This decision is expected to provide substantial relief to freelancers and single-owner businesses, many of whom faced challenges meeting the March-end registration deadline. For such entities, a refund or waiver of the penalty could offer meaningful financial relief.
“The mechanism for refunds will be announced shortly,” said Girish Chand, Senior Partner at MCA Management Consultancy. “Based on past precedents, the penalties already paid may be automatically reversed. These refunds could also be adjusted against future corporate tax liabilities.”
Over the past months, the UAE Federal Tax Authority (FTA) has actively supported businesses in complying with corporate tax registration requirements, issuing regular reminders and guidance for those operating on the mainland, in free zones, or as freelancers. Registration is managed through the Emaratax portal.
Mushtaq Khatri, CEO of mkACE Management Consultancy, advised businesses to ensure their bank details are updated in their Emaratax profile to facilitate the refund process. “The FTA has confirmed that businesses who paid the AED 10,000 penalty but meet the waiver criteria will be refunded. However, they may need to submit an application, and the FTA will review each case accordingly. Further clarification is expected.”
What Does the Ministry of Finance Say?
According to the Ministry of Finance, businesses will qualify for the penalty waiver if they file their corporate tax return or annual financial statements within 7 months of the end of their first tax period.
The objective is to encourage early compliance and reduce administrative burdens for businesses, particularly smaller operations that may have missed initial deadlines.
As one tax consultant noted, “Many UAE-based companies received penalties for failing to register on time. To qualify for a refund or waiver, they must now ensure timely filing of their first corporate tax return.”
