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Introduction:

The UAE’s Federal Tax Authority (FTA) has launched a timely initiative that offers relief to businesses that missed the corporate tax registration deadline. Under this new scheme, penalties for late registration will be waived—provided that specific conditions are met. This move aims to promote voluntary compliance with the new Corporate Tax Law and reduce the administrative burden on UAE-based businesses.

What Is the Late Registration Penalty?

Under the UAE Corporate Tax Law, companies that fail to register on time with the Federal Tax Authority (FTA) are subject to financial penalties. These late registration fines were introduced to encourage timely compliance and ensure that all businesses fall within the tax net. However, many businesses—especially smaller entities—have found it challenging to meet the initial deadlines, resulting in significant penalties.

Details of the Penalty Waiver Initiative

On April 25, 2025, the Federal Tax Authority officially launched a penalty waiver initiative for businesses that missed their corporate tax registration deadline. This limited-time scheme aims to reduce the financial and administrative burden on taxpayers while encouraging full compliance with the UAE Corporate Tax Law. According to the FTA, this initiative also aligns with the government’s broader efforts to enhance transparency, voluntary compliance, and global tax competitiveness. The waiver applies to both taxable persons and certain exempt entities, provided they meet specific criteria.

Conditions to Qualify for the Waiver

To benefit from the penalty waiver, businesses must fulfill specific conditions set by the FTA:

Submit the corporate tax registration application within the grace period.
File the first tax return or annual declaration within 7 months from the end of the first tax period.
Remain fully compliant with the UAE Corporate Tax Law and FTA requirements.

These conditions apply to both taxable persons and qualifying exempt entities. Failing to meet any of these criteria may result in the reinstatement of penalties.

Deadline and Urgent Action Required

The FTA has not disclosed a fixed deadline but urges businesses to register without delay. The penalty waiver is only applicable for a limited time, and once the grace period ends, full fines will apply. Businesses that haven’t yet registered should treat this as a final opportunity to avoid financial penalties and get compliant before the FTA begins strict enforcement.

How Fandeez Can Help

At Fandeez, we understand the complexities of UAE tax compliance and are here to guide you every step of the way. Whether you’re registering for corporate tax for the first time or unsure about your eligibility for the FTA’s penalty waiver, our tax specialists provide complete support—from application submission to ongoing compliance. Let us help you stay compliant, avoid penalties, and focus on growing your business.

Conclusion

The FTA’s penalty waiver offers a unique opportunity for businesses that missed the corporate tax registration deadline. By acting now, you can avoid unnecessary fines and ensure your operations remain compliant. Don’t wait for enforcement to catch up—take advantage of this relief window and let Fandeez help you navigate the process with confidence.