The United Arab Emirates has taken a significant step to ease the financial transition into its new corporate tax system. In a recent announcement on April 29, 2025, the Ministry of Finance (MoF) and the Federal Tax Authority (FTA) declared that administrative fines for late corporate tax registrations will be waived for qualifying businesses and individuals—provided they submit their tax returns or annual declarations within seven months following the end of their first tax period.
This decision reflects the country’s broader effort to promote voluntary compliance and offer flexibility during the first year of corporate tax enforcement.
Key Details of the Announcement:
Under the UAE’s corporate tax structure, which officially came into effect in 2023, businesses with taxable income exceeding AED 375,000 are subject to a 9% corporate tax rate. While thousands of businesses promptly registered, some missed the deadline due to the newness and complexity of the system.
To address this, the Cabinet has approved a waiver of penalties for delayed registrations—so long as businesses fulfill the condition of submitting their tax obligations (returns or declarations) within seven months after their initial tax period concludes.
According to the Federal Tax Authority, this measure does not just suspend future fines but also includes refunds for those who have already paid penalties—if they meet the criteria of the new relief program.
“The decision aligns with our strategy to build a simplified, taxpayer-friendly environment that supports economic growth,”
stated a spokesperson from the FTA.
Focus on Compliance and Ease of Doing Business:
This relief initiative is part of a larger strategy to reinforce the UAE’s reputation as a globally competitive business hub. By reducing regulatory pressure during the implementation phase, the authorities aim to enhance the business climate and encourage companies to remain compliant without added financial stress.
Officials also emphasized that this temporary measure is a one-time provision aimed at supporting businesses as they adapt to the Corporate Tax Law, and that all future tax obligations must adhere to standard compliance deadlines.
“These exemptions are designed to encourage businesses to act quickly while minimizing early burdens,”
an MoF representative added.
As the UAE transitions into a tax-inclusive economic framework, the authorities have made it clear that early cooperation will be rewarded with leniency. Businesses are advised to take advantage of this limited-time opportunity to fulfill their registration and filing obligations, securing both compliance and financial peace of mind as the new tax regime takes full effect.For further information, visit the official UAE Ministry of Finance or the Federal Tax Authority .
