Islamabad, May 2, 2025: In a major move to support businesses, the United Arab Emirates has introduced fresh regulations that cancel fines for companies and exempt entities that missed the deadline for tax registration.
The UAE Ministry of Finance (MoF), together with the Federal Tax Authority (FTA), has released a Cabinet Decision announcing an initiative designed to waive administrative penalties for those who failed to register for corporate tax on time.
Under this new policy, eligible companies must submit their tax returns or annual financial statements within seven months following the conclusion of their initial tax period, as set out under the UAE Corporate Tax Law.
Tax Fine Cancellation in UAE
This Cabinet Decision highlights the UAE government’s proactive steps to improve tax compliance and simplify the overall tax system.
It is designed to motivate taxpayers to file returns or submit annual declarations before deadlines, helping foster a culture of early compliance and legal responsibility.
Furthermore, the Federal Tax Authority has confirmed it will introduce the necessary processes to refund any administrative fines previously collected from businesses that now meet the exemption requirements.
Strengthening UAE’s Business Environment
This initiative reinforces the UAE’s commitment to building a supportive tax environment, easing operational challenges, and reducing financial strain on companies.
It allows businesses to fulfill their tax responsibilities without facing heavy penalties, provided they act within the set timeframes.
The new decision is expected to play a crucial role in promoting stronger tax compliance, particularly during the first year of corporate tax implementation in the country.
Read More: First May holiday in Saudi Arabia & UAE?
It also showcases the government’s dedication to supporting local enterprises by offering incentives that encourage voluntary adherence to tax laws, lessen administrative pressures, and enhance the UAE’s reputation on international business and competitiveness rankings.
With these reforms, the UAE solidifies its position as a leading global business hub, providing companies with the tools, flexibility, and encouragement needed to operate efficiently under the new tax regime.
