The UAE introduced corporate tax for the first time starting June 1, 2023. This was a major shift, especially for small and medium companies that had never dealt with such rules before. Many missed the registration deadline.
To ease this pressure, the UAE’s Ministry of Finance and the Federal Tax Authority (FTA) announced a significant step: businesses and certain exempt entities that failed to register for corporate tax on time will now be excused from late registration fines; if they submit their first tax return or annual statement within seven months after their first tax period ends.
Tax Gian, one of the top tax agents in the UAE, assists businesses in staying up to date with the regulations and complying accordingly.
No Fines for Late Registrations – If You Act on Time Now
The Federal Tax Authority (FTA) and the Ministry of Finance (MoF) launched a new scheme. The proposal exempts corporate tax late registration fees, with an exception. Companies are required to submit their first tax return or annual statement no later than seven months from when their first tax period ends.
Corporate tax agents in the UAEÂ help you register on time and correctly with the FTA.
Refunds for Fines Already Paid
There’s even better news. If a business previously paid a penalty for late registration but complies with the new requirements, it can have its money returned. The FTA has verified that refund processes are already in motion.
This refund feature is another relief factor. It shows that the government is in favour of promoting early compliance, rather than punishing companies trying to figure things out.
Seek help from corporate tax consultants in Dubai on how you can get the refund.
Why This Ruling Matters to Business
This waiver isn’t just about dodging a fine. It’s about making a statement: companies are being encouraged, not criticised. Officials understand that the corporate tax law is new. Most companies, particularly small ones, require time to adapt.
The ruling also keeps businesses from incurring additional costs at a time when every dirham counts. By granting them relief from penalties, the government can encourage more companies to comply without hesitation.
Who Qualifies for the Exemption?
Not every company will qualify. To benefit, a company must:- Be subject to corporate tax under UAE law
- Have missed the original registration deadline
- File their tax return or annual report within seven months from the end of their first tax period
This is not just for businesses but also for some exempt organisations that still have to register. The waiver is for those who actually missed the deadline but are willing to comply soon. You can also ask corporate tax consultants in the UAE to know where you stand.
Corporate Tax Compliance in UAE
Under the UAE’s Corporate Tax Law, the ordinary corporate tax rate is 9% on income above AED 375,000. Any company that makes less than that owes zero tax. The tax was implemented for financial years beginning on or after June 1, 2023.
There is also a higher tax rate of 15% for giant multinational enterprises in the UAE. This provision has also come into force for financial years beginning on or after January 1, 2025. All this is part of the UAE’s overall effort to conform to international tax standards without compromising on the friendliness of the business environment.
If you are a small business or a large multinational company, you can seek expert guidance about your liabilities from professional tax agents in Dubai.
Not Every Business Will Be Taxed
The Ministry of Finance made clear that natural persons carrying on business or business activities  with an annual turnover of over AED 1 million will be subject to tax. It thus makes sure that side or small businesses do not suffer excessively. It also means that numerous startups and freelancers will not be touched unless they hit the income limit. The provision assists in shielding small market participants and at the same time pulling more sizeable and more lucrative firms into the taxation scheme.
A Step Towards Long-Term Compliance
The government has set the record straight: this isn’t simply a matter of waiving fines. It’s creating a culture of compliance. Granting companies some breathing room to learn and respond appropriately now will make the system better in the long term.
The Finance Ministry and FTA are striving to simplify regulations, provide transparent communication, and aid businesses, particularly in their initial year of being subject to corporate tax.
How Can Tax Gian Help?
The government has indeed spared some businesses from paying fines; however, this will not happen again. If companies keep failing to register or pay corporate tax, strict actions will be taken by the FTA. Businesses can register for corporate tax in the UAE and fulfil their liabilities seamlessly with the help of Tax Gian, expert tax agents in the UAE. Our experts never fail clients and make sure that they comply with tax regulations up to 100%.
