To support businesses during the early phase of corporate tax implementation, the UAE Ministry of Finance (MoF) and the Federal Tax Authority (FTA) have announced a new Cabinet Decision. This initiative waives administrative penalties for corporate taxpayers and certain exempt entities. This initiative targets those who failed to submit their corporate tax registration applications within the designated timeframe.
Who Qualifies for the Penalty Waiver?
To benefit from the waiver:
- Eligible parties must file their tax return or annual statement within seven (7) months from the end of their first tax period, as defined under the Corporate Tax Law.
This decision shows the UAE government’s proactive effort to encourage early compliance, reduce financial strain, and simplify procedures for businesses adjusting to the new corporate tax system.
Refund of Fines for Compliant Entities
The FTA has confirmed it will implement the necessary procedures to refund administrative fines to businesses that meet the outlined criteria. This reinforces the government’s commitment to building a fair, efficient, and business-friendly tax system.
Encouraging Voluntary Compliance
The key goals of this initiative include:
- Enhancing overall tax compliance.
- Providing a compliance-friendly environment for businesses.
- Supporting national enterprises by reducing administrative and financial burdens.
- Improving the UAE’s ranking in global competitiveness indices.
This initiative is set to be a game-changer in ensuring smooth corporate tax adoption, particularly during its first year. By encouraging early and voluntary compliance, the UAE reaffirms its commitment to fostering a supportive business ecosystem.
Stay informed and make sure your business is prepared to meet corporate tax obligations on time. Need help with UAE Corporate Tax registration or filing UAE Corporate Tax Returns within the prescribed timeframe? Contact Auditac International—your trusted partner for corporate tax compliance and expert advisory.
