UAE Corporate Tax Registrations Rise After Penalty Waiver

The initiative applies to Taxable Persons and certain categories of Exempt Persons required to register with the FTA who were late in submitting their Corporate Tax registration applications within the specified deadline.

The FTA has clarified that to be exempt from the AED 10,000 ‘Late Registration Penalty’ for Corporate Tax, Taxable Persons or Exempt Persons required to register must submit their Tax Return or annual declaration no later than seven months from the end of their first Tax Period or the first Financial Year, instead of nine months.

Corporate tax penalty waiver boosts compliance

The Late Registration Penalty Waiver initiative applies only to the first Tax Period of the Taxable Person or Exempt Person required to register, regardless of whether the due date of the first Tax Return or annual declaration was before or after the new decision came into effect.

“This important initiative comes as part of the comprehensive strategy to support business sectors and encourage voluntary compliance with tax laws and procedures to avoid Administrative Penalties, which contributes to promoting economic growth, ensuring tax transparency and fairness within a legislative environment that keeps pace with developments through sustainable improvement, while maintaining performance quality and managing the tax system with the highest levels of efficiency and accuracy,” Khalid Ali Al Bustani, Director General of the Federal Tax Authority said in a statement.

Al Bustani also emphasised the importance of non-registered Corporate Tax Taxable Persons submitting their Corporate Tax registration applications to the FTA, followed by the submission of Tax Returns through the EmaraTax platform within the specified deadline.

The Director General noted that the initiative has resulted in increased registrations. Corporate Tax registrations have risen to 576,000 from 538,000 registrants before the launch of the waiver initiative in April 2025, representing an increase of 38,000 registrations.

“It is clear that the initiative to waive the Late Registration Penalty is incentivising many registrants for Corporate Tax as we note an increase in the number of Corporate Tax registrations to 576,000 – up from 538,000 registrants before the launch of the waiver initiative, in April 2025. This resulted in an increase of 38,000 additional registrations, as thousands of Corporate Tax registrants have submitted their Tax Return and annual declaration within the specified deadline to benefit from the Late Registration Waiver,” he added.

The Director General described these indicators as a reflection of the initiative’s success, showing how awareness of tax compliance and procedures is growing across all business sectors in the UAE.

“These indicators are a clear reflection of the initiative’s success, which shows how the awareness on tax compliance and procedures is growing across all business sectors, in the UAE. The FTA is keen to continue engaging with the business community through various awareness channels, as well as to seek taxpayers’ views and discuss ways to overcome any challenges they may face,” Al Bustani said.

The Authority is intensifying its efforts, in cooperation with relevant entities, to raise awareness about the importance of the initiative and the need for non-registered Corporate Tax Taxable Persons to act and benefit from the waiver initiative by submitting their registration applications, tax returns, and annual declarations within a period not exceeding seven months from the end of their first Tax Period or Financial Year.