Thousands of UAE businesses were hit with an AED 10,000 penalty for registering late for corporate tax. The Federal Tax Authority has opened a genuine way out: a waiver initiative that cancels the penalty, or refunds it if you already paid, as long as you file your first corporate tax return early enough. For most companies the qualifying deadline is 31 July 2026, which is now only about two weeks away. Here is exactly how the waiver works and what you need to do.
What is the FTA corporate tax penalty waiver initiative?
Under Cabinet Decision No. 75 of 2023, failing to submit a corporate tax registration application on time carries a fixed penalty of AED 10,000. In April 2025 the Cabinet approved a relief initiative, explained by the FTA in Public Clarification CTP006, that lets the FTA waive this penalty for taxable persons and certain exempt persons. The initiative took effect on 14 April 2025 and applies to late registration penalties incurred from 1 June 2023 onwards.
The condition is simple but strict: you must file your first corporate tax return, or your annual declaration if you are an exempt person, within seven months of the end of your first tax period. Meet that condition and the penalty disappears. Miss it and the AED 10,000 stands.
Who qualifies for the AED 10,000 waiver?
| Your situation | What the waiver does | What you must do |
|---|---|---|
| Penalty issued but not paid | The penalty is removed from your EmaraTax account | File your first corporate tax return within seven months of the end of your first tax period |
| Penalty already paid | AED 10,000 is credited back to your tax account, usable against tax due or refundable | Same filing condition as above |
| Registered late, no return filed yet | Waiver applies automatically once you file on time | File the return through EmaraTax before your seven month window closes |
| Exempt person fined for late registration | Same waiver on the same basis | Submit your annual declaration within seven months of the end of your first financial year |
There is no application form and no fee. The FTA processes the waiver automatically through EmaraTax once the qualifying return or declaration is submitted on time.
Why does 31 July 2026 matter for most businesses?
Most UAE companies follow the calendar year, so their first corporate tax period ended on 31 December 2025. Seven months from that date is 31 July 2026. File your first return by then and the waiver applies. This trips people up because the normal filing deadline is nine months after the end of the tax period, which would be 30 September 2026 for the same companies. The waiver requires filing two months earlier than you legally have to.
Not sure your first return will be ready in time?
Talk to a consultantWhat if you already paid the penalty?
You are not left out. If you paid the AED 10,000 and then file your first return within the seven month window, the FTA credits the amount back to your tax account on EmaraTax. You can use that credit against corporate tax due or request a refund. Again, no separate application is needed, but the filing condition must still be met.
What the waiver does not cover
- It applies only to the AED 10,000 late registration penalty, not to late filing or late payment penalties.
- It covers the first tax period only. Deadlines for later periods run as normal.
- Filing after your seven month window means the penalty stands, even if you file before the standard nine month deadline.
What to do before 31 July
- Confirm your first tax period end date on your EmaraTax corporate tax registration. If it is 31 December 2025, your waiver deadline is 31 July 2026.
- If you have not registered for corporate tax at all, register immediately. The waiver can still apply if you then file within the window.
- Close your 2025 financial accounts and prepare the figures needed for the return.
- File the first corporate tax return, or annual declaration for exempt persons, through EmaraTax before 31 July 2026.
- If you already paid the penalty, check your EmaraTax account after filing to confirm the AED 10,000 credit, then decide whether to offset it or request a refund.
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