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In a move to ease the transition into the new corporate tax regime, the United Arab Emirates’ Ministry of Finance (MoF), in collaboration with the Federal Tax Authority (FTA), has announced an initiative to waive administrative penalties for businesses and certain exempt entities that missed the deadline for corporate tax registration.
The measure is designed to support corporate taxpayers during the early stages of the UAE’s corporate tax implementation. To qualify for the relief, companies must submit their tax return or annual declaration within seven months of the end of their first tax period, in accordance with the UAE Corporate Tax Law.
The FTA confirmed that businesses meeting the compliance conditions will also be eligible for refunds on any penalties they have already paid.
This Cabinet-approved decision is expected to enhance compliance levels and offer temporary relief as businesses adapt to the new regulatory landscape. The initiative reflects the UAE government’s commitment to fostering a supportive and flexible tax environment, especially in the first year of corporate tax enforcement.
Authorities have encouraged businesses to act quickly and use the grace period to align with the legal requirements, stressing that non-compliance beyond the new deadline may still lead to enforcement action.
The UAE’s corporate tax law officially came into effect in 2023, marking a significant step in diversifying government revenue sources and aligning with international tax standards, while maintaining the nation’s pro-business appeal.
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