Corporate Tax Penalty Waive Off: A Relief Strategy for UAE Businesses

In a welcome move that reflects its continued commitment to ease the tax compliance journey, the Federal Tax Authority (FTA) of the UAE has launched a limited-time initiative to waive administrative penalties for the late submission of corporate tax registration applications.

This initiative is designed to support businesses, encourage voluntary compliance, and offer a much-needed reset for those who missed the initial deadline. Whether you've already registered late, are yet to register, or even paid the penalty—this scheme could benefit you, if you act within the defined timeframe.

Let’s break it all down in simple terms.

🧾 What Is This Initiative All About?

If you missed the deadline to register your company for Corporate Tax and were charged a late registration penalty, the FTA is now offering a chance to waive that penalty—provided certain conditions are met.

The aim?To give businesses a fair opportunity to get on the right side of the law without the burden of avoidable fines.

✅ Who Can Take Advantage of This Initiative?

This waiver applies to:

• Companies that already registered late and received a penalty, but haven’t paid it yet.

• Companies that registered late, paid the penalty, but are yet to submit their first tax return.

• Companies that have neither registered nor submitted their tax return yet.

In short:If you’re a business that should be registered for Corporate Tax and you either delayed it or haven’t done it yet—this initiative is for you.

⏳ What Are the Conditions to Qualify for the Waiver?

1. Registered Taxable Persons must submit their Corporate Tax Return within 7 months from the end of their first tax period.

2. Exempt Persons (who are not subject to Corporate Tax but still need to file a declaration) must submit their Annual Declaration within 7 months from the end of their first financial year.

   
   

Simple rule:🗓 Get your return or declaration in on time (within 7 months from the first tax period ending), and you’re in the clear.

📚 Scenarios Explained (So You Know Where You Stand)

Here are five real-life scenarios and what happens in each one:

📌 Scenario 1:

• You’ve registered late.

• You were issued a penalty.

• You haven’t paid the penalty yet.

• You submit your return within 7 months of your first tax period’s end.

✅ Result: Penalty is waived. You don’t have to pay it.

📌 Scenario 2:

• You’ve registered late.

• You received a penalty (unpaid).

• You haven’t submitted the return yet.

🛠️ What to do: Submit the return within the 7-month timeframe.

✅ Result: Penalty will be waived.

📌 Scenario 3:

• You registered late.

• You already paid the penalty.

• You haven’t submitted the return yet.

🛠️ What to do: Submit the return within the 7-month period.

✅ Result: The FTA will refund the penalty to your tax account.

📌 Scenario 4:

• You registered late.

• You paid the penalty.

• You’ve already submitted the return within the 7-month period.

✅ Result: You’re golden. The paid penalty will be refunded to your tax account.

📌 Scenario 5:

• You’ve not yet registered for Corporate Tax.

🛠️ What to do: Complete the registration and file your return or declaration within 7 months from the end of your first tax period.

✅ Result: If a penalty is imposed, it will be waived.

🔁 What Happens to Paid Penalties?

If you’ve already paid the penalty but meet the criteria for the waiver, the FTA won’t leave you hanging—they’ll refund the amount to your tax account, which can be adjusted against future payments.

📅 Why Act Now?

This initiative isn’t open-ended. It’s a limited-time opportunity to:

• Fix delays.

• Save money.

• Stay compliant.

It reflects the FTA’s intent to support businesses, not penalize them unnecessarily—provided there’s genuine effort to comply.

💡 Final Word

In a regulatory environment that’s still maturing, mistakes can happen—and the FTA knows that. This waiver initiative is their way of offering a second chance to businesses to course-correct without the burden of penalties.

So, if your business missed the Corporate Tax registration deadline, this is your moment to act.👉 Register, file, and breathe easy.

Still confused? Don’t go it alone—consult us today.