Prime Highlights
- Companies and exempt persons need to register for UAE corporate tax on or before July 31, 2025, to escape the penalty.
- In default, it will face a AED 10,000 penalty and exclusion from the waiver program.
Key Fact
- More than 33,900 have obtained penalty waivers with early registration.
- Seven-month tax reporting period only applies to waiver-qualifying entities in the first period.
Key Background
The Federal Tax Authority (FTA) issued a last reminder to companies and exempt persons in the UAE to register under the UAE corporate tax regime by 31 July 2025. This is one of the larger government efforts towards a blanket compliance with the new tax regime prevailing and a relief of once having not an onerous AED 10,000 penalty of delayed registration.
FTA has launched the Penalty Waiver Initiative for first-period returns, aimed at entities with a financial year close on December 31, 2024, and beginning on January 1, 2024. Entities have to register on time but also file their tax return within seven months of their end of financial year, rather than the customary nine months.
More than 33,900 corporate payers and exempt organizations have already made use of the initiative, pointing to the need for unregistered businesses to hurry. Unregistered businesses that fail to do so within this July deadline will lose their access to the scheme of waiver and will automatically be charged the fixed penalty.
Although late registration is an option technically after the deadline, such organizations will be excluded from the waiver and will have to pay the entire fine. Additionally, companies need to certify their approval of registration through the EmaraTax portal before submitting any return. Even after a proper submission of the return, absence of pre-registration will result in exclusion from the waiver scheme.
Organisations subject to the July 31 deadline of registration and filing are not excluded from remitting their corporate tax dues by September 30, 2025, and thus not risking their right of waiver. This is a move that leaves companies with a narrow but significant space of time to get into conformity with the UAE’s changing company tax regime and keep unnecessary financial imposition away.
