Home / Tax Compliance / FTA Penalty Waiver

Your FTA penalty
may be removable

There is an active FTA initiative that waives the AED 10,000 late corporate tax registration penalty. It has one condition, and a deadline. We check whether your file meets it.

AED 10,000Late CT registration penalty in scope

7 monthsFiling window from end of first tax period

5Scenarios covered by the waiver

14% p.a.Late payment penalty, charged monthly

Ask a consultant Read the detail

The initiative

The corporate tax late-registration waiver

The FTA runs an initiative that waives the AED 10,000 penalty for failing to submit a corporate tax registration application within the FTA's timeframe. The condition is a filing deadline, not an appeal letter.

✓ The penalty in scope — AED 10,000, imposed under Cabinet Decision 75 of 2023 for failure to submit a tax registration application within the FTA's timeframe.

✓ The single condition — Submit the tax return within 7 months from the end of the first tax period. Persons exempt from corporate tax submit the annual declaration within 7 months of the end of the first financial year.

✓ Seven months, not nine — The usual return deadline is later. The waiver requires filing early. Miss the 7-month mark and the relief is not available on that basis.

✓ Who it covers — Every entity required to register for corporate tax that either already has a late-registration penalty or has not yet registered at all.

✓ Already paid the penalty — If the penalty was paid and the return is filed inside the window, the amount is refunded to the tax account rather than waived.

✓ Where it happens — Everything runs through EmaraTax. Registration, the return or declaration, and the waiver or refund outcome all sit in the same account.

Find your position

The five scenarios

The FTA sets out five situations. Read down the list and find yours. The outcome depends on whether you are registered, whether the penalty has been paid, and whether the return has been filed.

Scenario	Your situation	Outcome
1	Registered, penalty issued and unpaid, return filed within 7 months	Penalty waived
2	Registered, penalty issued and unpaid, return not yet filed	File the return or annual declaration within 7 months, then the penalty is waived
3	Registered, penalty already paid, return not yet filed	File within 7 months, then the amount is refunded to the tax account
4	Registered, penalty already paid, return filed within 7 months	Amount refunded to the tax account
5	Not registered at all	Register and file the return or declaration within 7 months, then the penalty is waived if imposed

Corporate tax

Corporate tax penalty schedule

Cabinet Decision 75 of 2023, as amended by Cabinet Decision 10 of 2024 from 1 March 2024. These figures are published to the dirham. Find the line that matches the notice you received.

Violation	Penalty
Failure to submit a tax registration application in the FTA's timeframe	AED 10,000
Failure to keep required records and information	AED 10,000 per violation; AED 20,000 for a repeat within 24 months
Failure to submit tax data, records and documents in Arabic when requested	AED 5,000
Registrant fails to submit a tax return in time	AED 500 per month for the first 12 months, then AED 1,000 per month from month 13
Failure to submit, or late submission of, a declaration	AED 500 per month for the first 12 months, then AED 1,000 per month from month 13
Failure to submit a deregistration application in time	AED 1,000 on late submission and monthly thereafter, capped at AED 10,000
Failure to inform the FTA of a change requiring amendment of the tax record	AED 1,000 first violation; AED 5,000 for a repeat within 24 months
Submitting an incorrect tax return	AED 500, unless corrected before the return deadline
Failure to settle payable tax	14% per annum, charged monthly on the unsettled amount from the day after the due date
Voluntary disclosure of errors in a return, assessment or refund claim	1% per month on the tax difference, from the day after the original due date until the disclosure is submitted
Failure to submit a voluntary disclosure before being notified of a tax audit	15% fixed on the tax difference, plus 1% per month
Failure to facilitate a tax auditor	AED 20,000, payable from the representative's own funds

VAT and excise

VAT and excise penalty schedule

Cabinet Decision 40 of 2017, as amended by Cabinet Decision 49 of 2021 and Cabinet Decision 129 of 2025, effective 14 April 2026. A late VAT return is a flat amount. A late corporate tax return is monthly and uncapped. Do not read one figure across to the other tax.

Violation	Penalty
Failure to submit a registration application in time	AED 10,000
Registrant fails to submit the tax return in time	AED 1,000 first time; AED 2,000 for a repeat within 24 months
Failure to settle payable tax	14% per annum, charged monthly on the unsettled amount
Submitting an incorrect tax return	AED 500, unless corrected within the deadline, or a voluntary disclosure is filed that produces no difference in due tax
Voluntary disclosure of errors	1% per month on the tax difference
Failure to file a voluntary disclosure before audit notification	15% fixed on the tax difference, plus 1% per month
Failure to calculate tax due on import of goods	50% of the unpaid or undeclared tax
Failure to keep required records	AED 10,000; AED 20,000 for a repeat within 24 months
Failure to issue a tax invoice or alternative document in time	AED 2,500 per detected case
Failure to issue a tax credit note or alternative document in time	AED 2,500 per detected case
Failure to comply with conditions for issuing tax invoices and credit notes electronically	AED 2,500 per detected case
Breach of conditions for keeping or moving goods in a designated zone	Higher of AED 50,000 or 50% of the tax chargeable on the goods
Failure to display prices inclusive of tax	AED 5,000
Failure to give the FTA price lists for excise goods produced, imported or sold	AED 5,000 first time; AED 10,000 on repetition

Be clear-eyed

What a waiver requires, and what it does not do

The initiative is generous and widely missed. It is also narrow. Read this before assuming a penalty will disappear.

✓ It is not automatic — The waiver follows from meeting the filing condition. Nothing is removed because a penalty feels unfair or because a request was sent.

✓ It covers one penalty — The initiative addresses the AED 10,000 late corporate tax registration penalty. Late return, late payment, records and audit penalties are not part of it.

✓ Other penalties still run — Late payment is charged at 14% per annum, monthly, on the unsettled amount. A late corporate tax return accrues AED 500 per month rising to AED 1,000 per month from month 13, with no cap.

✓ Instalments and reconsideration are separate — Penalty instalment and reconsideration requests are applied for through EmaraTax. Conditions vary case by case and we will not predict an outcome.

✓ Legacy VAT and excise balances — Cabinet Decision 49 of 2021 allowed redetermination of unpaid VAT and excise penalties imposed before 28 June 2021 to 30% of the total where conditions were met. This is relevant only to old balances.

✓ We tell you where you stand — We identify the tax, the violation number and the legal basis, place you in one of the five scenarios, and say plainly whether the condition can still be met.

Fee guide

Our fee for this

Service	Fee (AED)
Penalty waiver application — our fee	20% of the amount waived

A contingent fee. On the AED 10,000 late Corporate Tax registration penalty that works out at AED 2,000 if the full amount is waived. If nothing is waived, you pay us nothing. The FTA may accept, partly accept or refuse a request — the outcome is never guaranteed.

Government charges are separate and are paid to the authority, not to us.

FAQ

Common Questions.

There is an active FTA initiative that waives it. The condition is that the tax return is submitted within 7 months from the end of the first tax period. Persons exempt from corporate tax submit the annual declaration within 7 months of the end of the first financial year. Meeting the condition is what produces the waiver. It is not granted on request.

Not necessarily. If you are registered, the penalty was paid, and the return is filed within 7 months, the amount is refunded to the tax account. That applies whether the return was already filed inside the window or is filed now. Do not write the money off before the file is checked.

No. Scenario 5 covers entities that are not registered at all. Register and file the return or declaration within 7 months from the end of the first tax period, and the penalty is waived if it has been imposed.

The waiver requires filing earlier than the normal return deadline. Seven months from the end of the first tax period is the condition set by the initiative. Filing later may still be a compliance obligation, but it does not satisfy the waiver condition.

No. The initiative addresses the late registration penalty. A late corporate tax return carries AED 500 per month for the first 12 months and AED 1,000 per month from month 13, with no cap. Unsettled tax carries 14% per annum, charged monthly from the day after the due date.

VAT and excise run on a different schedule, under Cabinet Decision 40 of 2017 as amended by Cabinet Decision 49 of 2021 and Cabinet Decision 129 of 2025, effective 14 April 2026. A late VAT return is AED 1,000 first time and AED 2,000 for a repeat within 24 months, not a monthly amount. The corporate tax waiver initiative does not apply to it.

Talk to a consultant

Which penalty have you been charged?

Give us the notice, the tax type and your financial year end, and we will come back with the position in writing.

Tell us your situation and a consultant replies with what actually applies to you, what it costs and what we need from you to start.

Your FTA penalty may be removable