The UAE’s Federal Tax Authority (FTA) has announced a new initiative that waives penalties for businesses that missed the corporate tax registration deadline. This decision comes as part of a UAE Cabinet Decision aimed at providing support to companies struggling to comply with tax regulations.

The waiver applies to businesses that file their tax return within seven months of the end of their first financial year. This provision is available to both regular businesses and certain exempt organizations that are still required to register for corporate tax. Importantly, the FTA clarified that this seven-month rule is only applicable to the first tax period and does not extend to future years.

Additionally, companies that have already paid penalties for late registration can benefit from this new decision. If these businesses meet the new deadline by submitting their tax return within the seven-month window, they will receive a refund of the fines, which will be credited to their tax accounts. The same refund policy applies to companies fined for late submission of returns, even if they filed before the official announcement of the waiver.

Khalid Ali Al Bustani, head of the FTA, urged businesses that have yet to register to act swiftly and submit their registration and tax returns through the EmaraTax platform to take advantage of this exemption. He also highlighted the significant progress in registration, noting that over 543 000 companies have signed up for corporate tax in the first quarter of 2025.

The FTA’s waiver is designed to encourage voluntary compliance with tax obligations and to streamline the tax process across various sectors. The authority will continue to raise awareness and provide guidance to help companies understand and fulfill their tax responsibilities.