Understanding the Corporate Tax Late Registration Penalty Waiver Initiative

The Federal Tax Authority (FTA) has announced a significant initiative aimed at easing the burden on corporate taxpayers : The waiver of administrative penalties related to late corporate tax registration.

Following the implementation of corporate tax in the UAE, the businesses fulfilling specific requirements must now register with the FTA within a given time frame. Lack of compliance with registration provisions within the timelines impose administrative fines. These penalties may be financially burdensome to new or small businesses that are still getting used to the new tax framework.

To appreciate the fact that businesses may find it difficult to comply with the registration requirement, the FTA has introduced a penalty waiver initiative that aims at giving relief to taxpayers who registered late but have made efforts to regularize their position. This initiative also extends to those who, despite missing the initial deadline, have proactively taken steps to align with the corporate tax regime in good faith.

Corporate Tax Penalty Waiver Initiative Highlights

What the Initiative Entails: The initiative of the FTA is on the waiver of administrative penalty charged on late applications to register corporate tax. This waiver is applicable to fines that accompany late filing of registration applications past the regulatory deadline.

Conditions for Qualifying for the Penalty Waiver

• Submission of Tax Return: To qualify for the waiver, a taxable person must submit their corporate tax return within seven (7) months from the end of their first tax period.
• Exempt Persons: Individuals or entities exempt from corporate tax are required to submit their annual declaration within the seven-month timeline from the end of their first financial year.

Who Benefits from the Corporate Tax Penalty Waiver?

• Corporate taxpayers who registered late: Taxpayers who registered late and were fined can have the penalty cancelled and refunded, if they meet FTA’s conditions.
• Corporate taxpayers who have not yet applied for corporate tax registration:Those who haven’t registered yet can still avoid the penalty by registering and filing within the deadline.

The Process of Filing Your Application and Tax Returns

The FTA encourages all taxable persons to apply through the official EmaraTax channel to submit applications of corporate tax registration and tax returns or annual declaration. The portal is accessible here: EmaraTax Platform.

As a guide, the FTA has elaborate information on corporate tax registration and exemption initiative on its official site. For detailed information about the Exemption Initiative and Corporate Tax registration, please refer to the FTA’s official website and tax guides.

How MBG Corporate Services Can Assist You in the FTA Waiver Initiative?

It may be difficult to manage the corporate tax compliance within strict deadlines. At MBG, we take the complexity out of it by offering customized services that will assist you to take advantage of the penalty waiver program announced by the Federal Tax Authority.

Our team will help you to register your corporate tax smoothly on the EmaraTax platform, and we will make sure that everything is accurate and filed at the right time. We assist in determining whether you are eligible for the penalty waiver, explain the terms and help you file your tax return or annual declaration on time before the 7-month limit.

So, It is time to be compliant and follow UAE corporate tax laws closely -avoid penalties, secure your business.