UAE Corporate Tax Refunds Begin for Businesses That Missed Initial Registration Deadline

There’s welcome relief for UAE businesses that missed the deadline to register for corporate tax and were issued a fine, refunds have now started to be credited back into their tax accounts.

In a key update shared in May, the Federal Tax Authority (FTA) announced that penalties for late corporate tax registration will be automatically waived or refunded, provided the business submits its tax return within seven months from the end of its first tax period.

What’s Being Refunded?

The fine for late registration is Dh10,000. Under the new FTA directive:

• If the fine has already been paid, it will be refunded to the business's tax account.

• If the penalty has been issued but not paid, it will be automatically waived within the system.

This decision has led to a notable pickup in corporate tax registrations across the UAE.

How to Qualify for a Refund or Waiver

It’s not enough to simply register late. To be eligible for the refund or waiver, businesses must file their corporate tax return within seven months of the end of their first tax period.

Example:

If a company’s first tax period runs from 1 January to 31 December 2024, it must file its corporate tax return no later than 31 July 2025. Meeting this deadline is essential to qualify for the relief.

However, many companies with the same January–December 2024 financial year may be under the standard nine-month filing rule, meaning their return would normally be due by September 2025. In such cases, to benefit from the refund or waiver, these businesses still need to meet the seven-month window to qualify.

The relief also applies to businesses with earlier financial years. For example, a company whose first tax period is from 1 July 2023 to 30 June 2024 is also eligible, provided the return is submitted by 31 January 2025 (within the 7-month window).