Have you missed the deadline for registering under the UAE Corporate Tax regulations? Are you facing an administrative penalty of AED 10,000? If yes, you should not bother about that because you might be eligible for a full waiver or refund of this penalty, but only if you meet specific conditions.
The Federal Tax Authority (FTA) has issued a new initiative under Corporate Tax Public Clarification No. CTP006. This initiative allows certain taxable persons and exempt persons to get relief from this penalty, as part of the UAE government’s strategy to support smooth compliance under the new corporate tax regulations. In this article, we explain the administrative corporate tax penalty, what the waiver initiative is, who is eligible for it, and how our tax experts in dubai can help you waive the penalty.Â
Understanding the Penalty
Under the UAE’s Corporate Tax Law, it is mandatory for all taxable businesses to register with the FTA. If a business fails to submit its corporate tax registration application within the specified timeframe, the FTA imposes an administrative penalty of AED 10,000, under Cabinet Decision No. 75 of 2023, in accordance with the provisions of the corporate tax law. However, with the latest FTA decision, there is now a way to waive or refund this penalty, provided certain conditions are met.
What Is the Waiver Initiative?
In order to ensure smooth tax compliance and minimize the impact of corporate tax penalty on startups and SMEs, a new waiver initiative has been introduced by the Federal Tax Authority (FTA). This waiver, issued on June 3, 2025, has been officially outlined in the Corporate Tax Public Clarification No. CTP006 of 2025.
Through this clarification, the FTA allows eligible Taxable Persons and certain Exempt Persons to waive or refund the AED 10,000 penalty for late corporate tax registration, but only if they meet clearly defined conditions.
Key Conditions to Qualify for the Waiver
The following are the conditions that must be fulfilled in order to qualify for the waiver:
Timely Submission of Tax Return
The business must submit its corporate tax return within seven months from the end of the first tax period or financial year. This is a mandatory condition, as the usual deadline for submission is nine months, but under this initiative, there are seven months.
First Tax Period Only
This initiative is applicable to the first tax period of the taxable person. The waiver only applies once and cannot be carried forward or reused in later periods.
No Extension on Payment of CT
Even if you qualify for the penalty waiver, it does not change the deadline to pay your corporate tax. The tax amount remains payable within nine months of the end of the first tax period. If you miss the tax payment deadline, it could result in additional penalties.
Who Is Eligible Under This Initiative?
The corporate tax penalty waiver is designed to support a wide range of taxpayers who may have missed their registration deadline, as given below:
Taxable Persons Who Missed the Deadline
Any taxable person (any individual subject to corporate tax in the UAE) who missed the deadline to register for corporate tax can waive or refund the AED 10,000 penalty, as long as it files its corporate tax return within seven months after the end of its first tax period. This relief applies whether the penalty has been paid or is still outstanding.
Exempt Persons With Approved Status
Some entities that are awarded the exempt status by the FTA are also eligible for the waiver. But this only applies if they submit their annual declaration within seven months after the end of their first financial year.
Taxpayer Who Submitted Reconsideration Requests
If a taxpayer has already submitted a reconsideration request regarding the late registration penalty, this new waiver automatically replaces it. The request is considered no longer valid, and the waiver applies if all conditions are met.
However, if the FTA has already approved the reconsideration and waived the penalty, then the person is not eligible for this new waiver a second time. The relief is only granted once, either through the previous process or under the current initiative.
Tax Groups and Their Members
Tax groups also fall under the scope of this corporate tax relief. If a tax group submits its first tax return within seven months after the end of the tax period, any late registration penalty given to a group member for that first period will be cancelled or refunded. This helps ensure that all eligible members within the group are treated fairly, especially when operating under a shared compliance structure.
What Happens If You Already Paid the Penalty?
If your business has already paid the administrative penalty amount of AED 10,000, you still get the benefit. Under this relief package, if you qualify for the penalty waiver, the FTA will credit the amount to your EmaraTax account, which can be used in one of two ways:
- The credited amount can be retained in your EmaraTax account and applied toward upcoming corporate tax liabilities.
- Secondly, you can submit a refund request through EmaraTax, and the amount will be returned to you.
How Can We Help You?
If you want to waive or refund the corporate tax administrative penalty, Now Consultant helps you in determining whether you are eligible for the late registration penalty waiver and helping you file your corporate tax return or annual declaration within the exact seven-month deadline.
Whether you are an individual Taxable Person, member of a Tax Group, or an Exempt Person, we help you avoid errors that could lead to unnecessary penalties. We ensure full accuracy in every step of filing corporate tax returns, and make sure your refund is processed smoothly.
With our support, you can mitigate the risks of penalties and legal consequences. But it is not just about mitigating risks, our consultants also help you benefit from every opportunity offered under the FTA’s latest relief initiatives.
