UAE Corporate Tax 2025: How to Avoid the AED 10,000 Penalty
Missed your UAE corporate tax registration deadline? There’s still time to avoid the AED 10,000 fine, but the window is closing fast.
The UAE Federal Tax Authority (FTA) announced a grace period allowing businesses to register late without penalty—if done within 7 months from your financial year-end. For most companies, this means registering by July 31, 2025.
What’s New in 2025?
On April 25, 2025, the FTA confirmed that under Cabinet Decision No. 75 of 2023, late registration fines will be waived for businesses that register within their grace period.
Example: If your financial year ended on December 31, 2024, your registration deadline is July 31, 2025.
✅ Key Details at a Glance
| Category | Details |
|---|---|
| Penalty Waiver | AED 10,000 fine waived |
| New Deadline | 7 months from end of 1st tax year |
| Most Common Deadline | July 31, 2025 |
| Applies To | All UAE businesses |
| Mandatory Platform | EmaraTax portal |
🏢 Who Needs to Act?
- Free Zone entities (even 0% rate qualifiers)
- Mainland LLCs and Sole Establishments
- Freelancers and Individual Businesses
- Foreign companies with UAE branches or permanent establishments
👉 If you're doing business in the UAE, registration is required regardless of tax rate.
Why This Waiver Exists
With the UAE's corporate tax system rolled out on June 1, 2023, many SMEs were unprepared. The FTA's temporary waiver is aimed to:
- Encourage full compliance
- Support lagging SMEs
- Ease the administrative burden
Penalty Risk Comparison
| Action | Before July 31, 2025 | After July 31, 2025 |
| Corporate Tax Registered | ✅ AED 0 | ❌ AED 10,000 fine |
| Return Filed On Time | ✅ Compliant | ❌ More penalties |
| Audit Risk | ✅ Low | ❌ High |
| FTA Relationship | ✅ Positive | ❌ Risk of sanctions |
🧾 Step-by-Step: How to Register on EmaraTax
- Sign up at EmaraTax Portal
- Prepare documents:
- Trade license
- Emirates ID / passport
- Business activity info
- Financial statements
- Submit your corporate tax registration
- Wait for your TRN (Tax Registration Number)
- Retain acknowledgment receipt for compliance records
FAQs: UAE Corporate Tax Penalty Waiver
Q1: Do I need to register if my business makes less than AED 375,000?
✅ Yes. All businesses must register, regardless of taxable income.
Q2: Is the waiver automatic?
❌ No. You must file by the 7-month deadline to benefit.
Q3: Can I appeal the AED 10,000 fine later?
❌ Not likely. Once the deadline passes, the fine becomes enforceable.
Q4: What if my financial year doesn’t end in December?
🗓️ Your deadline will be 7 months after your specific year-end.
Q5: What if I already received the fine?
📩 Contact in*******@af***********.com — we may help you appeal it based on your timeline.
💼 Affinitas DMCC: Your Tax Compliance Partner
Let us take care of your registration and corporate tax filing while you focus on running your business.
Our Services Include:
✅ Corporate Tax Registration – from AED 399
✅ Bookkeeping & Financial Reporting – from AED 999/month
✅ 0% Free Zone Tax Eligibility Review
✅ Year-round Compliance & Advisory - – from AED 4000
📞 +971 (0) 4 576 2903
📍 Fortune Tower, JLT – Dubai
📧 in*******@af***********.com
