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.
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.
