In May, the Federal Tax Authority (FTA) announced an initiative to waive and refund (as applicable) the late registration penalty incurred by companies and individuals from 01 June 2023 as a result of failure to register with Corporate Income Tax within the specified timelines.

In order to benefit from this initiative, a tax payer should submit the tax return within seven months from the end of its first tax period instead of nine months.

Where a tax group files its Tax Return within seven months from the end of the tax period, the late registration penalty imposed on any member of the tax group shall be waived under this initiative and the amount credited, if applicable, provided that it is the first tax period of the member of such tax group.

Entities exempt from corporate tax such as Qualifying Public Benefit Entities (QPBE), Qualifying Investment Funds (QIF) are also eligible for the penalty waiver. Such exempt persons should submit their annual declaration within 7 months from the end of their first financial year.

Tax payers within the scope of this initiative are eligible for this waiver even if the late registration penalty has already been settled. In such case, a refund shall be made by crediting the amount to the person’s EmaraTax account which could be utilized against its corporate tax payable or request a refund.

Whilst filing of the tax return is two months earlier, FTA has clarified that this does not affect the deadline for the settlement of the corporate tax payable which remains payable within nine months from the end of the first tax period.