UAE To Waive a Corporate Tax Penalty
BREAKING NEWS for UAE Businesses:
If you missed the deadline to register for UAE Corporate Tax, there's now a crucial opportunity to avoid the AED 10,000 penalty—but the clock is ticking.
The Federal Tax Authority (FTA) has announced a limited-time penalty waiver for businesses that failed to register for corporate tax on time. However, you must file your registration within 7 months from the end of your financial year. For most businesses, that means completing the registration by July 31, 2025.
This article from Affinitas DMCC breaks down what you need to know, what to do next, and how we can help you stay compliant—and avoid unnecessary fines.
What’s New?
On April 25, 2025, the UAE Federal Tax Authority officially confirmed a temporary waiver of the AED 10,000 late registration fine under Cabinet Decision No. 75 of 2023—provided businesses register for corporate tax within the 7-month grace period from their first financial year-end.
Example:
- If your business’s financial year ended December 31, 2024,
you must register before July 31, 2025 to avoid the AED 10,000 fine.
Key Highlights
| Category | Details |
|---|---|
| Fine Waiver | AED 10,000 penalty waived temporarily |
| Deadline | 7 months from end of first tax period |
| Most Common Deadline | July 31, 2025 |
| Eligible Entities | All unregistered UAE businesses under Corporate Tax regime |
| Mandatory Action | Submit Corporate Tax registration online via EmaraTax |
Who Is Affected?
This update impacts:
- Free Zone companies (including those eligible for 0% rate)
- Mainland LLCs and sole establishments
- Foreign entities with permanent establishments in the UAE
- Freelancers and sole proprietors generating business income
Even if your business qualifies for 0% tax (e.g., under AED 375,000 income), you must still register and file annually.
Why Did the FTA Announce a Waiver?
The UAE’s corporate tax law came into effect on June 1, 2023, and many small and mid-sized businesses were unprepared for the administrative rollout. The FTA’s limited-time grace period is intended to:
- Encourage compliance
- Support businesses with delayed registrations
- Reduce the burden on SMEs during implementation
Comparative Table: Penalty Scenario
| Action Taken | Before July 31, 2025 | After July 31, 2025 |
|---|---|---|
| Tax registration filed | ✅ AED 0 penalty | ❌ AED 10,000 penalty |
| Tax return filed (on time) | ✅ No issue | ❌ Additional late filing penalties apply |
| Future audit risk | ✅ Low | ❌ High |
| FTA credibility & compliance | ✅ Maintained | ❌ Damaged |
What Happens If You Miss the July 31 Deadline?
Failing to register by the extended deadline means:
- AED 10,000 late registration fine
- Possible late filing penalties
- Difficulty in renewing business licenses
- FTA audits or restrictions
- Damage to business reputation and future tax history
How to Register for Corporate Tax in UAE
- Create an account on the EmaraTax portal
- Gather the following documents:
- Trade license
- Emirates ID / passport
- Financial statements
- Business activity details
- Submit your corporate tax registration application
- Wait for the Tax Registration Number (TRN) approval
- Keep a record of acknowledgment for compliance purposes
Related News
- UAE Introduces Grace Period for Corporate Tax Registration – The National
- FTA Clarifies Tax Registration Requirements – Gulf News
Frequently Asked Questions (FAQ)
Q1: If I qualify for 0% tax, do I still need to register?
Yes. Even if your income is below AED 375,000, registration is mandatory.
Q2: What is the penalty for failing to file the return?
You may face monthly late filing penalties and complications in business license renewal.
Q3: Can I appeal the AED 10,000 fine after July 31?
In most cases, no. The waiver is only available before the deadline.
Q4: Is the deadline the same for all businesses?
No. It depends on the end of your financial year. Most entities with a December 31 year-end must file by July 31, 2025.
Q5: How can I check my status?
Log in to your EmaraTax portal or contact Affinitas for help.
How Affinitas DMCC Can Help
At Affinitas DMCC, we offer fast-track Corporate Tax Registration services to ensure you're compliant and penalty-free. Our experts handle the paperwork, submissions, and follow-ups so you can focus on your business.
Services Include:
- ✅ Corporate Tax registration filing – From AED 399
- ✅ Bookkeeping & Financial Statements – From AED 999/month
- ✅ Year-round tax advisory and compliance monitoring
- ✅ Free Zone entity assessment for 0% eligibility
Avoid the AED 10,000 Penalty Before It's Too Late
Register for Corporate Tax Today with Affinitas DMCC
Let our tax specialists handle everything.
Book a Free Consultation | 📞 +971 4 576 2903
