The Ministry of Finance (‘MOF’) and the Federal Tax Authority (‘FTA’) have announced an initiative for waiver of penalties levied by FTA on account of late submission of application for Corporate Tax Registration. This is a welcome move and would largely benefit various taxpayers that faced such penalties who can now avail this relief and get the penalty waived or refunded if already paid.

Waiver of Penalty for late submission of Corporate Tax Registration application

The Ministry of Finance (‘MOF’) and Federal Tax Authority (‘FTA’) have announced issuance of a Cabinet Decision on an initiative for waiver of penalties levied by FTA on account of late submission of application for Corporate Tax Registration.

Who Will Benefit?

All taxable persons under the UAE Corporate Tax Law, including certain categories of Exempt Persons that are required to file an annual declaration, that missed the deadline to submit Corporate Tax Registration application due to which penalty of AED 10,000 is levied.

Conditions to avail the penalty waiver

The Corporate Tax Return or the annual declaration as applicable must be submitted within 7 months from the end of the tax period by complying with all provisions under the Corporate Tax Law (as against the standard time line of submitting Corporate Tax Return within 9 months from the end of the tax period).

Way Forward

While the Cabinet Decision along with the process to avail the waiver is still awaited, however, it is recommended that taxpayers who wish to avail the penalty waiver should prepare to file the Corporate Tax Returns within the aforesaid timeline of 7 months from the end of the respective tax period to benefit from the penalty waiver.