Many UAE businesses have recently faced a fine for missing the corporate tax registration deadline. The penalty for late corporate tax registration is AED 10,000, and it applies even to companies that delayed unintentionally. The good news is that the Federal Tax Authority (FTA) now offers a waiver initiative that allows eligible businesses to remove or even refund this fine. 

Understanding how the process works can help you avoid losing money and stay compliant.
Read on to discover how to waive the penalty for late corporate tax registration, the eligibility requirements, and the exact steps to follow to secure your waiver.

What Is the Penalty for Late Corporate Tax Registration?

When a UAE business fails to register for corporate tax on time, the FTA imposes a fixed administrative fine of AED 10,000. This rule comes under Cabinet Decision No. (75) of 2023, which outlines penalties for non-compliance with the corporate tax law.

This fine applies specifically to late registration, separate from other penalties such as late filing or late payment. It is automatically charged once a company misses the FTA registration deadline, unless a valid waiver applies.

📚 Also read: How UAE Corporate Tax Law Affects Your Business

Why the UAE Offers a Waiver for Late Registration

The UAE government introduced a penalty waiver to encourage businesses to comply without facing unnecessary financial pressure. During the first phase of corporate tax implementation, thousands of companies were still learning the process, and the FTA responded by creating a temporary relief measure.

This initiative helps businesses that acted late but are now ready to register and file properly. The FTA’s goal is to support compliance rather than punish honest mistakes, allowing penalties to be waived or refunded for those who meet specific conditions.

Who Is Eligible for the Waiver

To qualify for the waiver of the penalty for late corporate tax registration, a company must meet the FTA’s eligibility rules:

✅Businesses that missed the registration deadline but later registered

✅Companies that are already registered but received an AED 10,000 penalty notice

✅Entities that paid the penalty and want it refunded or credited in their EmaraTax account

✅Both mainland and free zone companies, except those permanently exempt

Important reminders:

✅The waiver only applies to the first tax period

✅You must file your first corporate tax return or annual declaration within seven months from the end of your first tax period

✅Failing to meet this timeline cancels your waiver eligibility

📚 Also read: Tax Compliance UAE: Expert Guidance for Businesses

Key Conditions to Waive the Penalty for Late Corporate Tax Registration

To have your AED 10,000 penalty waived or refunded, you must meet all of the following conditions:

✅You are registered with the FTA through the EmaraTax platform

✅You submit your first corporate tax return or declaration within seven months from the end of your first tax period

✅You have no other pending violations or unpaid penalties under FTA regulations

✅If you already paid the fine, it will be refunded or credited to your EmaraTax account after review

✅The waiver applies only to the first tax period; delays in later years will not qualify

Step-by-Step: How to Waive the Penalty for Late Corporate Tax Registration

Follow these steps carefully to remove or recover the penalty:

Step 1: Identify Your First Tax Period

Find the end date of your company’s first tax period. For example, if your financial year closes on December 31, 2024, that marks the end of your first period.

Step 2: Calculate the 7-Month Filing Deadline

Add seven months to your tax period’s end date. Using the same example, your filing deadline would be July 31, 2025.

Step 3: Register in EmaraTax

Log in to EmaraTax and complete your registration. Attach your trade license, Emirates ID, and any other required documents.

Step 4: Prepare and File Your Tax Return

Collect your financial statements, income records, and expense reports. File your corporate tax return or declaration before your 7-month deadline.

Step 5: Check Your EmaraTax Account

After submission, check your dashboard. If you qualify, the AED 10,000 penalty will either be automatically removed or credited to your account.

Step 6: Use or Request a Refund

You can leave the credit to offset future taxes or request a refund directly in EmaraTax. The process happens automatically once all conditions are satisfied.

Example Scenarios of the Waiver in Action

Scenario	Action Taken	Waiver Result
Registered late, didn’t pay penalty yet, filed return on time	Filed within 7 months	Penalty automatically waived
Paid AED 10,000, filed return within 7 months	Complied with all conditions	Refund or credit issued
Registered and filed return within 7 months	Fully compliant	Waiver applied
Filed after 7 months	Missed deadline	No waiver granted

What Happens If You Miss the Waiver Deadline

If you do not meet the waiver conditions, the AED 10,000 penalty becomes due and enforceable. You may also face:

✅Additional fines for late filing or late payment

✅Potential non-compliance flags in FTA records

✅Challenges when renewing business licenses or applying for tax clearance

Once the seven-month window has passed, there is no opportunity to claim the same waiver again. Future compliance is the only way to avoid repeated penalties.

📚 Also read: Corporate Tax Filing Deadline 2025: Filing Dates & Rules in UAE

Common Mistakes That Can Void Your Waiver

Businesses often lose their eligibility due to preventable errors such as:

✅Registering but failing to submit the first tax return

✅Filing after the seven-month deadline

✅Submitting incomplete or incorrect data

✅Ignoring FTA alerts in EmaraTax

✅Confusing the late registration waiver with other tax reliefs

To avoid these mistakes, consider using Odoo, Zoho Books, or QuickBooks to manage deadlines and generate accurate financial reports.
If you need help setting up your accounting software or ensuring error-free compliance, OPAB can guide you every step of the way.

📚 Also read: Filing VAT Returns in UAE: What Every Business Must Know

How Refunds or Credits Work

If you already paid the AED 10,000 penalty but later meet all waiver conditions:

• The FTA will process a refund or issue a credit to your EmaraTax account
  
• You can use the credit for future tax payments or request a full refund
  
• The refund process time may vary depending on verification
  
• Keep digital proof of your return submission and payment receipts for records
  

How Many Businesses Have Benefited

The FTA announced that over 33,900 companies across the UAE have benefited from the corporate tax penalty waiver initiative. This shows that many businesses successfully avoided or recovered their AED 10,000 fines after registering and filing on time.

The waiver is a limited-time opportunity that applies only to the first tax period, making prompt compliance essential for all registered companies.

Tips to Maximize Your Chance of Waiver Approval

• Register and file as soon as possible; do not wait until the last week
  
• Use reminders or accounting software to track tax dates
  
• Double-check your data before submitting to avoid rejections
  
• Maintain copies of all confirmation emails and FTA notifications
  
• Work with experienced accountants, such as Outsource Prime Accountants and Bookkeepers (OPAB), to handle tax setup and compliance accurately

Conclusion

The penalty for late corporate tax registration can be completely avoided or refunded if you act quickly. By registering with the FTA, filing your corporate tax return or annual declaration within seven months, and ensuring compliance through EmaraTax, you can have the AED 10,000 fine waived without filing any extra paperwork.

If you need expert help to manage your accounting software or maintain ongoing tax compliance, reach out to Outsource Prime Accountants and Bookkeepers (OPAB). OPAB supports businesses across Dubai and the UAE with reliable implementation of Odoo, Zoho Books, and QuickBooks to ensure full accuracy and transparency.
Contact OPAB today for tailored support that fits your business needs.

FAQs

Is it mandatory to file corporate tax in the UAE?

Yes. All taxable companies must register and file corporate tax returns, even if profits are low or nil.

How much does it cost to register for corporate tax?

The FTA does not list any government fee for registration via EmaraTax. However, failing to register on time results in a fixed AED 10,000 fine unless waived.

How is the corporate tax period calculated in the UAE?

It usually matches your company’s financial year. The end of this period starts your seven-month filing timeline.

How do I calculate my corporate tax?

Corporate tax is based on your net taxable income after allowable deductions and charged at the statutory rate set in UAE law.