Corporate Tax

UAE Corporate Tax Fine Waiver

UAE Corporate Tax Fine Waiver: A Lifeline for Late Registrants?
UAE Corporate Tax Fine Waiver: A Lifeline for Late Registrants? 800 500 HRSG

It is not easy for businesses, especially if they are small and startups, to adapt to the new and evolving tax framework of the UAE, which can make compliance difficult.

Recognizing this fact, the Ministry of Finance UAE and the Federal Tax Authority have introduced a new initiative called the UAE Corporate Tax Fine Waiver 2025. This waiver has been introduced to reduce financial and administrative burdens for businesses that registered late for the corporate tax but have demonstrated a good-faith effort to comply with the UAE corporate tax regime.

This waiver is truly a lifeline for businesses that were not able to do their corporate tax registration on time, as it gives them an opportunity to ease into the new tax policies of the region without being subject to immediate financial penalties.

This blog covers the ins and outs of the corporate tax penalty waiver UAE 2025, highlighting the conditions under which a business may qualify. Keep reading to learn more.

  • The Objectives of the UAE Late Corporate Tax Registration Fine Waiver
  • Conditions for Getting the UAE Late Corporate Tax Registration Fine Waiver
  • UAE Late Corporate Tax Registration Fine Waiver: Who Can Qualify?
  • Actions That FTA Will Take to Waive the Fines
  • Important Points to Keep in Mind
  • How To Receive the Corporate Tax Late Registration Penalty Waiver

The Objectives of the UAE Late Corporate Tax Registration Fine Waiver

The UAE government introduced a temporary corporate tax penalty waiver in April 2025 to help businesses adapt to the new tax regulations. This waiver can help businesses avoid an AED 10,000 late registration penalty if they meet specific conditions.

The UAE Corporate Tax Fine Waiver is an initiative that has been introduced to give relaxation to late applicants of the corporate tax registration. Companies that submitted their tax registration applications late but filed their tax returns within the 7-month grace period may be eligible for the waiver.

Here are the main objectives of this waiver:

  • To encourage and ensure early or timely compliance with the latest tax regulations.
  • To reduce the financial burden on startups and SMEs.
  • To promote a culture of tax transparency and financial responsibility.
  • To strengthen the UAE’s position as a business-friendly destination.
  • To align with the best global corporate tax practices.

Conditions for Getting the UAE Late Corporate Tax Registration Fine Waiver

The following are some conditions that a business must fulfill to be able to get the FTA late corporate tax registration fine waiver:

  • Taxable entities must submit their tax returns within 7 months from the end of their first tax period instead of the standard 9-month period.
  • Exempt entities that were subject to the fines but were later approved for the exemption can also file their annual declaration or tax returns in the same timeframe to benefit from the waiver.
  • This initiative applies to both the entities that have not submitted their registration application and the ones that have already incurred penalties due to delayed corporate tax registration.

UAE Late Corporate Tax Registration Fine Waiver: Who Can Qualify?

Every corporate entity under the FTA corporate tax regime is eligible for the fine waiver provided they meet the above conditions. The following section lists some common scenarios where this waiver is applicable. So, keep on reading to determine whether you fall into one of these categories.

Scenario 1

Businesses that registered late and have already received a penalty but haven’t yet paid it may still qualify for a waiver, provided they submit their returns within 7 months of the financial year-end.

Scenario 2

This scenario deals with businesses that registered late and have not paid their penalties or filed their returns. These businesses have to file their returns within 7 months from the end of their first tax period to become eligible for the waiver. 

Scenario 3

In this case, businesses that have paid their penalties but not the tax returns can get their money back. To do that, they need to file their returns within the required time and apply for a refund of the penalty paid.

Scenario 4

In this case, a business that registered late has already paid the penalties and filed its returns. The tax account of such businesses will receive a refund of the penalty amount for showing good faith.

Scenario 5

In this scenario, the business has neither registered on time nor filed its returns before the deadline. If such businesses get registered and file their returns within seven months, their penalty will be waived.

corporate tax uae

Actions That FTA Will Take to Waive the Fines

If you meet the conditions for the waiver and your case is similar to one of the above-mentioned scenarios, the FTA will take the following actions to issue the late corporate tax registration fine waiver:

  • For unpaid penalties, the fine will be waived, and it will not appear as payable on the EmaraTax Corporate Tax account of the taxable person.
  • If the penalties are paid, AED 10,000 will automatically be refunded to the EmaraTax Corporate Tax account of the business.
  • If FTA receives a reconsideration request for the late registration penalty, the request will be considered null and void, as the penalty is already waived.
  • If the reconsideration request was already received and approved, that business will not be eligible for further waivers.

Important Points to Keep in Mind

The following are some key points that you need to keep in mind when it comes to the UAE Corporate Tax Fine Waiver.

  • This waiver applies only to the first tax period, whether it is in the past or the future.
  • This initiative doesn’t affect the deadline for filing Corporate Tax Payable, which is 9 months following the end of the first tax period.
  • If you belong to a tax group and the group files its returns within 7 months from the end of the first tax period, all members will have their penalties waived, even if they individually are subject to the late registration penalty.

How To Receive the Corporate Tax Late Registration Penalty Waiver

Here are some steps that you need to follow to claim your corporate tax late registration penalty waiver:

  • Visit the official EmaraTax platform and register for corporate tax.
  • File your tax return within 7 months following the end of your first tax period.
  • Ensure that all your financial records and documents are updated, accurate, and according to the standards set forth by the International Financial Reporting Standards (IFRS).
  • Apply for the penalty refund by submitting proof of timely filing via the EmaraTax portal.

Conclusion

The corporate tax fine waiver for late registration is an incredible initiative that highlights the UAE’s commitment to creating a business-friendly environment where every entity is encouraged to fulfill their tax obligations without being subject to financial or administrative burdens.

This waiver allows businesses to adapt to the evolving tax landscape of the UAE and avoid or reclaim penalties that they might have incurred due to late tax registration.

Businesses can now submit their corporate tax returns within the prescribed 7-month grace period to avoid a fine of up to AED 10,000 or receive a refund if already paid. This gives much-needed relief to SMEs to familiarize themselves with the current corporate tax laws of the UAE.

You can visit us at HRSG to get comprehensive corporate tax services, including registration, filing, reporting, and more. Our dedicated team of experts will ensure you stay compliant with every UAE tax law and face no financial liabilities. 

Corporate Tax In UAE

How To Register for Corporate Tax In UAE: A Complete Guide​
How To Register for Corporate Tax In UAE: A Complete Guide​ 800 500 HRSG

Corporate tax registration is an important part of running a successful business in the UAE. To ensure seamless operations and to make the most of the region’s relaxed tax policies, every business needs to understand how to register for corporate tax in the UAE.

Ever since the introduction of the corporate tax system in 2023, every business operating in the region is required to register for this tax. However, most businesses have no idea how this registration process works.

Failing to file corporate tax returns on time can result in fines and even license cancellation. To avoid these issues, you need to stay on top of your corporate tax responsibilities.

This blog covers the detailed process for corporate tax registration in the UAE. Using this information, you can easily register for this tax and save yourself both time and trouble.

  • Understanding Corporate Tax in the UAE
  • Who Must Register for Corporate Tax in the UAE?
  • Exemption from the Corporate Tax
  • Corporate Tax Rate
  • How to Register for Corporate Tax in UAE: Step-By-Step Process
  • Common Mistakes to Avoid When Registering for Corporate Tax in the UAE

Understanding Corporate Tax in the UAE

The corporate tax is the direct tax on the net income of businesses that operate anywhere in the UAE.

The Ministry of Finance in the UAE introduced the corporate tax law in 2022 to fully implement it in the financial year 2023. The FTA’s Federal Decree Law 47 states that every taxable business, including those in the free zone, must register for corporate tax and get a tax registration number (TRN).

After registration, these entities will pay tax at a standard rate of 9% if their taxable income exceeds the AED 375,000 threshold. If the taxable income of a business is below this threshold, it will be charged with 0% corporate tax.     

Who Must Register for Corporate Tax in the UAE?

If your business falls into the taxable category under the UAE corporate tax policies, you must register for corporate tax. Every business that earns more than AED 375,000 annually must register for this tax on a mandatory basis.

The following are the main entities that must register for corporate tax:

  • Businesses in the UAE mainland
  • Freezone businesses conducting business with the mainland
  • Banking and financial institutions
  • Foreign entities with permanent UAE offices
  • Companies or entities that are managed and controlled within the UAE

Register for Corporate Tax In UAE

Exemption from the Corporate Tax

Some businesses in the UAE are exempt from corporate tax. Though FTA requires such businesses to register for corporate tax or value added tax, they are subject to a 0% tax rate.

Following are some exemptions from the corporate tax in the UAE:

  • The salary of the employee
  • Income from shares, dividends, or capital gains earned in a personal capacity
  • Entities involved in the extraction of natural resources
  • Intra-group transactions or reorganizations 
  • Real estate investments 

Corporate Tax Rate

The Federal Decree-Law No. 47 of 2022 of the UAE states that every taxable entity whose income exceeds AED 375,000 annually must pay corporate tax at the rate of 9%.

Companies whose taxable income is below AED 375,000 and the ones that operate in the UAE free zones are subject to a 0% tax rate. In the case of free zone companies, they must meet the Qualifying FreeZone Person criteria and possess qualifying income if they are to be taxed at a 0% rate.

How to Register for Corporate Tax in UAE: Step-By-Step Process

Following is the detailed step-by-step process for corporate tax registration in the UAE:

  • Gather required documents such as trade licenses, financial statements, company information, bank account information, contact details, passport and ID copies of owners, authorized signatories, shareholders, and directors.  
  • Access the Emaratax portal from the FTA website and register for a new account.
  • Login to the portal with your accurate credentials. You will see all taxable entities linked to your account on the dashboard.
  • If there are no taxable entities, you can add a new one to proceed.
  • Click on “Register for Corporate Tax” to begin.
  • Add entity details like entity type, i.e., mainland business, free zone company, etc., and trade license number, legal structure, and registration number.
  • Click on “Add Business Activities” and then enter the details about the specific activities conducted under your trade license.
  • Entities whose 25% or greater stake is owned by certain individuals must enter the complete ownership details.
  • Businesses that have more than one branch, must add the trade license as well as the business activities of each branch. 
  • Add your business address, phone number, email, and other contact details.
  • Add details like IDs and passport details of persons who are authorized to sign tax papers on your behalf. You must add the correct details of the authorized signatories as well as relevant proof of authorization.
  • After filling out the information, review the entire application carefully. Then tick the declaration box to proceed.
  • Finally, you can submit the registration form by clicking on the “Submit” button.

After submission, the FTA will review your application to ensure the details you have provided are all accurate. You can expect to get a confirmation email for the corporate tax registration along with a TRN in 20 business days. 

Calculating Corporate Tax In UAE

Common Mistakes to Avoid When Registering for Corporate Tax in the UAE

Following are some of the most common mistakes that you must avoid to ensure accurate corporate tax registration in the UAE:

  • Not registering for the corporate tax on time.
  • Entering incomplete or incorrect details of your business.
  • Not paying attention to proper record-keeping or documentation.
  • Not claiming tax incentives or tax deductions.
  • Not seeking assistance from corporate tax professionals. 

Conclusion

Most businesses find it hard to navigate the complex process of corporate tax registration in the UAE. Not paying attention to deadlines, financial record keeping, and proper filing of returns are just a few ways these businesses mess up the process and suffer a great deal.

However, with proper due diligence and a proactive approach, it is possible to handle your corporate tax responsibilities better and avoid issues like operational disruptions or fines.

Businesses can further streamline their tax registration and financial management processes by seeking help from tax professionals. These experts facilitate timely and accurate tax filing, thus ensuring full compliance.

You can visit us at HRSG to get the best corporate tax, VAT, and accounting services for your businesses all over the UAE.  

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