Significant Support for Small Enterprises and Independent Professionals
In a move welcomed by the business community, the UAE’s Federal Tax Authority (FTA) has announced a waiver of penalties for late corporate tax registration, specifically aimed at supporting small businesses, startups, and freelancers. Furthermore, entities that have already paid these fines will receive refunds, underscoring the UAE’s commitment to fostering a pro-business environment.
What’s New? No More AED 10,000 Penalty
Previously, failure to register for corporate tax within the stipulated timeframe incurred a penalty of AED 10,000. This posed a significant financial burden, particularly for smaller operations and independent professionals. The FTA’s recent decision eliminates these penalties, providing much-needed relief to businesses that missed the initial registration deadline.
Refunds for Paid Penalties
The FTA is not only waiving future penalties but is also set to reimburse businesses that have already paid the AED 10,000 fine. Sources indicate that the refund process may involve automatic crediting or adjustments against future tax obligations. While the exact procedures are still being finalized, this initiative demonstrates the authorities’ dedication to easing financial pressures on businesses.
Key Actions for Businesses
Businesses are advised to ensure their Emaratax portal profiles are up to date, paying particular attention to bank account details. It is anticipated that a formal refund request may be necessary, and the FTA will likely review each case individually. Official guidelines on the refund process are expected to be released shortly.
Maintaining Compliance is Crucial
To benefit from this penalty relief, businesses must adhere to ongoing compliance requirements. The Ministry of Finance has clarified that eligible entities should file their corporate tax returns or annual statements within seven months from the end of their first tax period.
FTA's Proactive Guidance
The FTA has been actively involved in assisting businesses, including mainland companies, free zone entities , and freelancers, with the registration process via the Emaratax portal. Through consistent updates and reminders, the authority has aimed to facilitate a smoother transition to the new corporate tax regime.
A Welcome Development for the Business Sector
Small businesses and freelancers have widely applauded the decision to waive penalties and offer refunds as a positive and supportive measure. By reducing the financial burden of compliance, the UAE continues demonstrating its commitment to empowering entrepreneurs and fostering a more accessible business landscape.
Need Assistance with UAE Corporate Tax?
Our team is available to provide guidance and support. Whether you require assistance with corporate tax registration , understanding your obligations, or navigating the refund process, our experts can help streamline the process for your business. Contact us today to ensure your business remains compliant and strategically manages its tax responsibilities. At Unicorn Global Solutions, we simplify the process for you. Unicorn Global Solutions is here to help! Text us on whatsApp or call us today .
Frequently Asked Questions (FAQs)
Businesses that failed to register for corporate tax on time but comply with subsequent filing requirements, such as submitting tax returns or annual statements within seven months of their first tax period, are eligible for the penalty waiver.
The penalty for late corporate tax registration was AED 10,000. The UAE Federal Tax Authority has announced that businesses that paid this fine will receive a refund if they meet the eligibility criteria.
To qualify for a refund, ensure your business’s bank details are updated on the Emaratax portal. You may also need to submit a formal refund request, and the Federal Tax Authority will review the case before releasing funds.
The exact timeline for refunds has not been confirmed, but the FTA is expected to release detailed procedures soon. Refunds might be processed through automatic crediting or adjustments against future tax liabilities.
Businesses must complete their corporate tax registration, update their details on the Emaratax portal, and file their tax returns or annual statements within the prescribed deadlines to avoid penalties in the future.
NOTE:
The above note is subject to further study and clarification. It does not constitute a formal opinion from our end. Before making any decisions based on the above, we recommend consulting our experts on the subject.
