Abu Dhabi: The Federal Tax Authority has announced the implementation of a UAE Cabinet Decision to exempt certain corporate taxpayers from administrative penalties incurred due to late registration applications, provided they meet specific conditions.

According to Emirates News Agency, the decision allows taxable persons or exempted categories to qualify for the penalty waiver if they submit their Tax Return or Annual Declaration within a period not exceeding seven months from the end of their first Tax Period or Financial Year, rather than the previously allowed nine months. This condition applies solely to the first tax period, regardless of whether the return's due date falls before or after the decision's implementation.

The Authority also clarified that if penalties have already been paid for late submissions, they will be refunded to the taxpayer's account if the conditions for the exemption are met. This refund policy also applies to registered persons who submitted their tax returns before the exemption's implementation and were penalized.

Khalid Ali Al Bustani, Director-General of the FTA, urged unregistered corporate taxpayers to expedite their corporate tax registration applications and tax returns via EmaraTax to take advantage of the exemption. He emphasized FTA's commitment to transparency and flexibility within the evolving tax legislative environment, which aims to enhance economic growth through widespread compliance.

Al Bustani praised the significant increase in corporate tax registrations, which exceeded 543,000 by the first quarter of 2025, indicating growing awareness in the business sector regarding tax compliance. He assured that the FTA will continue to engage with businesses through various channels to aid in compliance and address potential challenges.

The FTA detailed the exemption's applicability, noting that it covers all persons required to register for corporate tax, irrespective of whether they have been penalized for late registration. Legal conditions for exemption include filing returns within seven months of the first tax period's end, with penalties refunded if previously paid.

The FTA encourages taxpayers to familiarize themselves with the Corporate Tax Law and related guidelines available on their website to ensure compliance.