The FTA clarified conditions for waiving or refunding penalties for late corporate tax registration, requiring returns or declarations to be filed within seven months of the first tax period.
The UAE Federal Tax Authority (FTA) has released Corporate Tax Public Clarification CTP006, addressing the waiver of administrative penalties for not submitting a corporate tax registration application by the required deadline.
The summary of CTP006 includes the following:
Persons required to register for Corporate Tax, including juridical persons intending to apply for the exemption referred to under Article 4(1)(e) to (i) of the Corporate Tax Law, may be subject to an Administrative Penalty of AED 10,000 for failure to submit a Tax Registration application for Corporate Tax to the FTA within the timeline set by the FTA (“Late Registration Penalty”).
The FTA has launched an initiative to waive this Late Registration Penalty provided that a Taxable Person submits its Tax Return within seven months from the end of its first Tax Period, instead of nine months.
Persons that were subject to a Late Registration Penalty and subsequently became exempt from Corporate Tax following an application approved by the FTA, may also benefit from this waiver, if they submit their annual declaration within seven months from the end of their first Financial Year, instead of nine months.
Persons within the scope of this initiative are eligible for this waiver even if the Late Registration Penalty has already been settled. In such a case, a refund shall be made by crediting the amount to the person’s EmaraTax account.
This initiative only applies to the first Tax Period, whether in the past or in the future.
This initiative does not affect the deadline of when a Taxable Person must settle the Corporate Tax, when a Taxable Person must settle the Corporate Tax Payable to the FTA, which remains payable within nine months from the end of the first Tax Period.
