An administrative penalty of AED 10,000 awaits every UAE entity that misses its corporate‑tax registration deadline. Yet for a short time, the Federal Tax Authority (FTA) is letting latecomers wipe the slate clean through a targeted corporate‑tax registration penalty waiver. Uptake has been rapid: registrations jumped from 538 000 in April to 576 000 by 16 July 2025 after the waiver was announced, signalling both its value and its looming expiry.

This article explains what the waiver covers, who can still benefit, and the critical steps you must complete before the cut‑off. If your business is racing against the clock, treat this as your action roadmap.

Understanding Corporate Tax Registration Penalties

Under the UAE corporate tax law, every taxable entity whose first tax period began on or after 1 June 2023 must register for corporate tax with the Federal Tax Authority (FTA). Missing that window triggers an administrative penalty, a flat AED 10,000 corporate tax penalty officially recorded as a corporate‑tax registration penalty.

While the amount is fixed, the wider impact can be far more damaging. Non‑compliant businesses risk losing eligibility for government tenders, waiting longer for crucial tax‑clearance certificates, and attracting extra scrutiny in future audits. In practical terms, the penalty can choke commercial momentum, restrict credit lines, and erode investor confidence.

Inside the Penalty‑Waiver Initiative

The current penalty‑waiver initiative is based on FTA Decision No. 3 of 2024 and reinforced by a Cabinet Decision issued in May 2025. It is a focused relief measure that allows eligible businesses to eliminate the AED 10,000 corporate tax penalty arising from late registration, provided they meet specific compliance steps.

The waiver only covers the penalty for late corporate‑tax registration, not other violations under the corporate tax law. It applies just once per entity and only for the first tax period.

To benefit from the waiver, companies must complete two essential filings through EmaraTax within a shortened seven‑month tax period:

• Register for corporate tax via EmaraTax

• Submit the first corporate tax return or annual tax return within the same seven‑month window

Previously, businesses had up to nine months. But by tightening this window, the Federal Tax Authority has clearly signalled the urgency of immediate compliance.

If a company fails to complete both steps within the applicable tax period, the penalty becomes due in full, and the opportunity to waive it is permanently lost.

Who Qualifies?

The corporate tax penalty waiver is available to a select group of businesses that failed to meet their initial corporate tax compliance obligations but still have an opportunity to regularize their status under the UAE’s Tax Procedures Law and Federal Decree‑Law No. 47 of 2022.

You may qualify for the penalty waiver if you fall into one of the following categories:

• Taxable Persons (such as LLCs, PSCs, or partnerships) whose first tax period began after 1 June 2023 and who missed the original deadline to register for corporate tax.

• Exempt Persons required to register, such as government or non-profit entities engaged in commercial activities.

• New entities incorporated on or after 1 March 2024 that failed to meet the three‑month registration requirement but are still within the seven‑month eligibility window to complete both registration and their first corporate tax return or tax return.

However, businesses are not eligible for the corporate tax registration penalty waiver if the Federal Tax Authority (FTA) has already imposed and collected other corporate tax fines, such as for incorrect or late filing of a return. The waiver strictly applies to the penalty for late registration only and does not extend to other tax frameworks like excise tax or unrelated penalties.

To benefit, entities must act quickly and align with their outlined tax obligations and legal responsibilities under UAE law.

Seven‑Step Pathway to a Successful Corporate‑Tax Registration Penalty Waiver

To successfully obtain the corporate tax penalty waiver, every taxable person must follow a clearly defined, time-sensitive process aligned with UAE Fcorporate tax regulations and the new rules introduced by the Federal Tax Authority. Each step must be completed within the seven‑month grace window linked to your first tax period to avoid the AED 10,000 late penalty for late registration.

1. Gather required documents –

Ensure all trade‑licence data (numbers, issue and expiry dates), shareholder details, and UAEPass credentials are up to date and correctly reflected in the EmaraTax system. Inaccuracies here often cause delays.

2. Prepare financial‑year evidence –

You’ll need supporting materials such as your Memorandum of Association, board resolutions, or audited accounts that confirm the official start of your first tax period. These documents are essential for proving your compliance with the FTA’s criteria.

3. Log in to EmaraTax and register for corporate tax –

Submit the full Corporate Tax Registration application. If your business qualifies as exempt under the law, be sure to flag this correctly during submission.

4. Receive your TRN (Tax Registration Number) –

The FTA typically issues the TRN within 24 to 72 hours if your information and documents meet international standards and system expectations.

5. Configure your accounting system –

Map the necessary corporate‑tax chart of accounts so that your platform can generate accurate return data aligned with your tax period.

6. File your first corporate tax return or annual declaration –

This is a mandatory step before the seven‑month deadline. Ensure your tax return or annual declaration is complete and supported by required financial statements.

7. Monitor the EmaraTax dashboard for confirmation –

Once the FTA verifies your submission, the AED 10,000 corporate tax penalty for late registration is either automatically removed or credited to your account, thus completing the penalty waiver process.

Timely action, accurate data, and well-prepared filings are essential for success. Delays in any of these steps could cost your business both money and compliance standing.

What happens if you miss the window?

• Immediate cash impact : AED 10,000 becomes payable.

• Blocked tax clearance : delaying bank finance, tender bids, or shareholder payouts.

• Possible further sanctions : late‑return penalties (from AED 500 up) and 14% annual interest on underpaid tax.

• Reputational damage : non‑compliance flags in due‑diligence checks.

In contrast, timely action converts the fine into working capital and demonstrates governance strength to partners and regulators alike.

How Young & Right Secures Your Penalty Waiver Before It’s Too Late

At Young & Right, we specialise in helping corporate taxpayers navigate last-minute compliance challenges with confidence. With the AED 10,000 fixed penalty for late submission about to become final for many entities, our experienced corporate tax experts act quickly to ensure you don’t miss your due date and can still qualify for the corporate‑tax registration penalty waiver. This is how Young & Right ensure you avoid penalties and preserve your cash flow:

1. Eligibility Audit :

We begin by reviewing your tax profile, identifying your seven‑month grace period, checking for filing gaps, and flagging any potential penalties. This audit helps establish whether your registration application and tax documents are still within the window to claim the waiver.

2. Rapid EmaraTax Registration :

Our team of tax agents and legal representatives submits complete and accurate registration applications via the EmaraTax platform, usually within 24 hours. We ensure all supporting data is aligned with your actual tax account.

3. Return Preparation & Review :

We assess your financials and prepare your corporate tax return, ensuring it complies with tax assessment standards and reflects any tax difference or exemptions. This step ensures submissions are audit‑ready and reduces risk of penalties related to misstatements.

4. Real‑Time FTA Liaison :

We manage communication with the Federal Tax Authority on your behalf, responding to queries that may otherwise delay processing or jeopardise your waiver.

5. Post‑Waiver Monitoring :

Once your tax return is accepted, we verify the removal of the AED 10,000 penalty from your EmaraTax dashboard. If applicable, we secure proof of the waiver or credit note for your accounting records.

With the grace period closing fast, Young & Right’s proactive service helps you avoid fines, maintain full corporate tax compliance, and ensure your tax account remains penalty‑free. For businesses at risk of late registration, there is still time, but only with the right support.

Conclusion

The FTA’s waiver initiative is a one‑time opportunity to erase the penalty for late corporate‑tax registration. But the clock is ticking: for many companies the deadline is 31 July 2025, and every day of inaction narrows your margin for error. Assemble your documents, log into EmaraTax, and if speed or complexity is a concern, let Young & Right shoulder the process. Act now, secure the waiver, and start your corporate‑tax journey penalty‑free.