UAE Corporate Tax: Companies Begin Receiving Refunds for Late Registration Penalties

Dubai: In a welcome relief for businesses in the UAE, companies that missed their corporate tax registration deadlines and incurred fines are now beginning to receive refunds—directly credited to their tax accounts.

The Federal Tax Authority (FTA) announced in May that penalties for late corporate tax registration would be automatically waived or refunded if businesses file their corporate tax returns within seven months from the end of their first tax period.

For those who have already paid the AED 10,000 fine, the amount is being refunded to their tax accounts. If the fine had been issued but not yet paid, it is now being waived in the FTA’s system.

“Where the penalty has already been paid, the amount will be refunded to that business’s tax account,” said Sumayya Zain, Founder and CEO of Dubai-based Hallmark International Auditors.

This development is especially beneficial for SMEs, where cost savings are crucial. One small business owner noted, “Our auditor confirmed that the refund on the late registration penalty will be processed soon. Every dirham counts.”

Eligibility Criteria

To benefit from the refund or waiver, companies must file their corporate tax returns within seven months from the end of their first tax period.

For example, if a company’s first tax period is from January 1 to December 31, 2024, the tax return must be submitted by July 31, 2025 to qualify.

For companies with a different financial year—such as July 1, 2023 to June 30, 2024—they must also file within the designated 7-month period to receive the benefit.

Understanding the Tax Account

Refunds are credited to a business’s tax account, which must be created through the EmaraTax portal—the FTA’s digital platform for tax registration, filing, and management.

This initiative by the FTA not only eases the financial burden on businesses but also encourages timely compliance, offering a second chance to those who missed their original deadlines.