If you register and file your Corporate Tax return within 7 months from the end of your first tax period, the AED 10,000 late registration penalty will be waived.
If your financial year ends on 31 Dec 2024, your CT penalty waiver deadline is 31 July 2025.
The CT penalty waiver is the FTA’s way of giving businesses a second chance to comply without immediately slapping them with the AED 10,000 fine for late Corporate Tax registration.
So, ensure you register and complete filing processes within the grace period to benefit from the CT penalty waiver.
The following parties are eligible for waivers.
1. Got fined but haven’t paid?
If the AED 10,000 penalty was issued but still unpaid, it will be automatically waived once you submit your first CT return on time. Thanks to the CT penalty waiver, you won’t have to bear the cost.
2. Paid already?
You can apply for a refund through your EmaraTax account as long as your return is filed within the allowed time frame. The fine will be credited back.
3. Haven’t registered yet?
You still can, but you must register and file before your personal deadline hits. Do both correctly, and the CT penalty waiver ensures the fines won’t apply.
4. Exempt entity?
Even if your business is exempt, you must still register and file your declaration. Skip it, and the penalty applies just the same. Comply, and the CT penalty waiver covers you too.
You submit your first CT return within 7 months after your first tax period ends to benefit from the CT penalty waiver.
Yes, registration is mandatory, even if your Free Zone business expects to be exempt from Corporate Tax.
The FTA requires all businesses, including Qualifying Free Zone Persons and fully exempt entities, to register for Corporate Tax.
Registration is the first step toward proving your exempt status, and skipping it means you’re non-compliant by default.
If you don’t register, you can still be hit with the AED 10,000 penalty, regardless of your tax position unless you act within the timeline offered under the CT penalty waiver.
FTA portal will automatically be updated once you’ve registered your business on EmaraTax and have filed your first Corporate Tax return correctly on time. No special request or form is required.
Once the return is submitted, it typically takes up to 20 working days for the penalty status to be updated in your EmaraTax account.
If you're a freelancer or sole proprietor in the UAE, whether Corporate Tax applies to you depends on how much you earn and how your business is set up.
If you’re operating under a trade license and your annual income exceeds AED 1 million, you are required to register for Corporate Tax and may be liable to pay it.
However, if you're a natural person earning less than AED 1 million annually through freelance work, you're not required to register or pay Corporate Tax.
That said, freelancers operating under a juridical entity, such as an incorporated company or Free Zone license, must register regardless of income level.
Is the AED 10,000 penalty only for late registration? What if I file the return late?
Yes, the AED 10,000 penalty applies only to late Corporate Tax registration. But don’t breathe easy just yet; late filing of your Corporate Tax return comes with separate monthly penalties, as outlined in the FTA’s compliance rules.
So, while you might qualify for a CT penalty waiver under Cabinet Decision No. 10 for late registration, that waiver does not cover late return submissions.
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