UAE Corporate Tax: Businesses Must Register July 31 Or Face $2,723 Penalty

The initiative applies to Corporate Taxpayers and certain exempt persons who are required to register with the FTA.

In a press release issued today, the FTA revealed that as of today, the number of beneficiaries from the Penalty Waiver Initiative for Late Corporate Tax Registration has reached more than 33,900.

Register for Corporate Tax by July

The FTA indicated that Thursday, July 31, will be the final deadline to benefit from the initiative for the majority of Corporate Tax payers whose first Tax Period aligns with the calendar year from January 1 to December 31, 2024.

To qualify, they must complete all procedures related to submitting their registration applications and filing their Corporate Tax Returns through the ‘EmaraTax’ platform before the end of July 2025.

The FTA confirmed that failure to meet the requirements and completing the procedures by July 31 will result in ineligibility for the waiver and the imposition of a late registration penalty of AED 10,000 for non-registered persons.

The authority clarified that to be exempt from the late registration penalty, the taxable person or exempt person required to register must submit their Corporate Tax Return or annual declaration within a period not exceeding seven months from the end date of their first Tax Period or financial year, instead of the standard nine-month deadline.

The FTA emphasised that the Penalty Waiver Initiative applies only to the first Tax Period of the taxable person or exempt persons who are required to register with the FTA.

The FTA issued a public clarification on the Waiver Initiative, which can be accessed through the link “Waiver of Administrative Penalty for Failure to File Corporate Tax Registration within the Prescribed Period.”

The public clarification includes a detailed explanation of the conditions to benefit from the waiver of the Late Registration Penalty, as well as the refund mechanism in cases where a penalty has already been paid. The document provides examples of how to benefit from the initiative in different scenarios.

The public clarification provides an explanation for those eligible to benefit from the initiative, as well as certain exempt persons who are required to register for Corporate Tax.

Within the clarification, the FTA highlighted that if the Person within the scope of this initiative meets the conditions to benefit from the waiver – namely, filing the Tax Return within seven months from the end of the first Tax Period or filing an annual declaration within seven months from the end of its first Financial Year – they will be exempt from the “Late Registration Penalty” automatically without the need to submit a Reconsideration or Penalty Waiver request.

In case the Late Registration Penalty has already been paid, the amount of AED 10,000 shall be automatically credited to that Person’s ‘EmaraTax’ Corporate Tax account, which enables them to use the amount to settle other tax obligations or request a refund from the FTA by submitting a refund application.