With the implementation of the UAE Corporate Tax Law through Federal Decree-Law No. 47 of 2022, businesses across the Emirates are now mandated to register for corporate tax. To support businesses during this transition, the Federal Tax Authority (FTA) has introduced a vital initiative—a waiver and potential refund of the AED 10,000 administrative penalty for late registration under certain conditions.
This blog explains the key elements of the FTA’s recent Public Clarification (CTP006) issued on 2 July 2025, which offers much-needed clarity on how businesses can benefit from the waiver of the late registration administrative penalty.
Background: The AED 10,000 Penalty
According to Cabinet Decision No. 75 of 2023, a fixed administrative penalty of AED 10,000 is imposed on any Taxable Person who fails to register for Corporate Tax within the timeline specified by the FTA.
However, understanding that many businesses may have missed this deadline unintentionally—particularly during the initial implementation—the Cabinet approved a waiver and refund initiative, effective from 14 April 2025, but applicable retroactively to late registrations from 1 June 2023.
Who Is Eligible for the Penalty Waiver?
The waiver initiative covers a wide range of entities including:
- Natural or juridical persons (individuals or companies) required to file a tax return.
- Entities that formed or joined a Tax Group after initially registering as separate taxable persons.
- Qualifying Public Benefit Entities listed in Cabinet Decision No. 37 of 2023.
- Exempt Persons under Article 4(1)(f)–(i) of the Corporate Tax Law, who were initially required to register but were later granted exemption.
- Natural or juridical persons (individuals or companies) required to file a tax return.
Key Condition: File Early
To qualify for the waiver:
- Taxable Persons must submit their first Tax Return within 7 months (not the usual 9 months) from the end of their first Tax Period.
- Exempt Persons must submit their annual declaration within 7 months (not the usual 9 months) from the end of their first Financial Year.
Already Paid the AED 10,000? You Can Still Get a Refund
Under the UAE Corporate Tax Penalty Waiver, businesses that have already paid the late registration penalty are eligible for a refund if the specified conditions are met.
- The AED 10,000 will be credited to the taxpayer’s EmaraTax account.
- This credit can be used for future Corporate Tax liabilities or refunded upon request via the EmaraTax platform.
What Happens to Existing Reconsideration Requests?
- If the penalty has not yet been paid, the penalty will be removed from the EmaraTax account upon meeting the conditions.
- If a reconsideration request was submitted but not yet decided, it becomes void as the waiver will apply automatically.
- If a reconsideration request was already approved, no additional waiver applies.
Final Thoughts: Act Now to Maximise Benefits
The UAE Corporate Tax Penalty Waiver initiative by the FTA offers a rare opportunity for businesses to rectify missed Corporate Tax registration deadlines without incurring the AED 10,000 penalty. However, this relief is strictly conditional on timely filing—within 7 months from the end of the first Tax Period or Financial Year.
For many businesses navigating the newly implemented Corporate Tax regime in the UAE, compliance can be complex and time-sensitive. That’s where professional guidance becomes invaluable.
RVG Chartered Accountants ensures you’re compliant, penalty-free, and stress-free. From registration to refund claims—we handle it all.
📞 Connect with RVG today for a free consultation. Your tax peace starts here..
