The UAE’s Federal Tax Authority (FTA) has started issuing refunds to businesses penalized for missing corporate tax registration deadlines, providing welcome relief, especially for small and medium enterprises (SMEs). These refunds follow the FTA’s May 2025 announcement offering an automatic waiver or refund of the AED 10,000 late registration penalty, provided businesses submit their corporate tax returns within a specified grace period.
Key Deadline-Based Relief Announced by FTA
In a bid to support compliance and ease financial strain on businesses, the FTA confirmed that penalties for late registration would be either waived or refunded automatically if the tax return is filed within seven months from the end of a business’s first tax period.
“Where the penalty has already been paid, the amount will be refunded to that business’s tax account,”
said Sumayya Zain, Founder-CEO at Hallmark International Auditors, Dubai.
The refund process has already begun, with funds being credited to businesses’ tax accounts via the EmaraTax portal, which is the official digital platform for corporate tax operations in the UAE.
Who Is Eligible?
To qualify for the refund or waiver, companies must meet the following requirement:
- File their corporate tax return within seven months from the end of their first tax period.
For example:
- A company with a financial year from January 1 to December 31, 2024, must submit its return by July 31, 2025.
- If the financial year is July 1, 2023, to June 30, 2024, the return must be filed by January 31, 2025, to benefit from the relief.
If the fine was already paid, the refund will appear in the business’s tax account. If not paid yet, the system will automatically waive it.
Many SMEs view this move as a much-needed relief. “Every dirham saved comes in handy,” said one UAE-based business owner.
“Our auditor confirmed the refund is being processed, which helps improve our cash flow.”
What Is a Tax Account?
A tax account is a digital account every registered business maintains on the FTA’s EmaraTax platform. It tracks tax filings, payments, penalties, and refunds. All interactions with the FTA related to corporate tax—including the new refund mechanism—occur through this portal
The UAE’s corporate tax reform continues to evolve with a business-friendly approach. This recent measure by the FTA underscores its commitment to easing compliance for companies, especially during the early phases of corporate tax implementation. Businesses are advised to ensure timely submission of tax returns to capitalize on this opportunity for refund or waiver.
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