In a major relief for businesses, the UAE has waived the Dh10,000 administrative penalty for late corporate tax registration. Furthermore, businesses that were already fined for missing the registration deadline are set to receive full refunds. This news comes from the Federal Tax Authority (FTA).
This move is expected to benefit small and individual-run businesses the most. Freelancers, who faced a March-end deadline to register under the new corporate tax law, will especially benefit. Many such entities reportedly struggled to meet the cutoff, and the fine had been a source of concern.
“This is a welcome decision,” said Girish Chand, Senior Partner at MCA. “The refund could either be processed automatically or adjusted against the company’s corporate tax liability. The refund mechanism will be clarified soon.”
The FTA has actively supported businesses throughout the tax registration process. Regular reminders have been issued to entities on the mainland, in free zones, and among freelancers. They are urged to submit required documents through the Emaratax portal.
For those who have already paid the penalty, updating bank details in the Emaratax system is recommended. “We believe impacted businesses must ensure their tax profiles are current,” said Mushtaq Khatri, CEO of mkACE Management Consultancy. “The FTA may require an application for the refund and could review the case before processing it.”
The FTA has confirmed that businesses which paid the Dh10,000 fine and meet the conditions for the waiver will indeed receive refunds. Although, further clarification is expected regarding whether the process will be automatic or application-based.
This move underscores the UAE’s commitment to easing the compliance burden on businesses. They adapt to the corporate tax regime introduced in 2023.
