Abu dhabi: The Federal Tax Authority (FTA) announced that the total number of beneficiaries from the Corporate Tax Late Registration Penalty Waiver initiative exceeded 68,600 Taxable Persons for Corporate Tax purposes during 2025 and the elapsed period of 2026.
According to Emirates News Agency, the FTA expects this number to increase to over 91,000 beneficiaries due to the esteemed Cabinet Decision regarding the waiver initiative. This decision applies to administrative penalties incurred by Taxable Persons and certain categories of Exempt Persons required to register with the FTA, as a result of late submission of registration applications within the legally specified timeframe. The initiative, which came into effect in April 2025, covers any late Corporate Tax registration penalties from 1 June 2023, provided certain conditions are met.
The FTA indicated that the penalty exemption requires the Taxable Person, or the Exempt Person required to register, to submit their Tax Return or annual declaration within a period not exceeding seven months from the end date of their first Tax Period or Financial Year, instead of the usual nine-month timeframe. The initiative is applicable solely to the first Tax Period of the Taxable Person or the Exempt Person required to register.
Abdulaziz Al Mulla, Director General of the FTA, urged non-registered Corporate Taxable Persons to benefit from the initiative. He emphasized that the initiative aligns with the UAE's leadership directives to implement a transparent tax system while maintaining economic momentum through a flexible tax environment that encourages voluntary compliance.
Al Mulla further stated, "The FTA is intensifying its efforts to support and assist Taxable Persons, providing continuous facilitations that enable them to fulfill their tax obligations, thereby enhancing the UAE's competitiveness in the field of doing business." He noted that more than 22,000 Taxable Persons are currently eligible to benefit from the initiative. The initiative covers Corporate Taxable Persons and certain Exempt Persons who were late in submitting their tax registration applications and consequently incurred penalties.
The FTA clarified that if a person meets the exemption conditions by submitting the Tax Return or Annual Declaration within the specified seven-month period, the penalty will be waived automatically. If the penalty has already been paid, a credit equal to the penalty amount will be added to the Taxable Person's account on the EmaraTax platform, which can then be used to settle other tax liabilities or be refunded upon request.
The waiver applies to cases where persons have registered and been charged a penalty, whether paid or unpaid, and to those who have not yet submitted the Tax Return or registered. In all cases, the penalty will be cancelled or refunded as applicable.
The FTA urged all concerned parties to review the Public Clarification on its website, which provides detailed information about the conditions for benefiting from the waiver, the mechanism for refunding the Corporate Tax late registration penalty, and illustrative examples of various cases.