Grace Period to update information in Tax Record

FTA’s New Grace Period: Update Your Tax Records Without Penalties

The UAE’s Federal Tax Authority (FTA) has announced a new grace period designed to help businesses keep their tax records current without facing penalties. From January 1, 2024, to March 31, 2025, tax registrants have the opportunity to update essential information in their FTA tax records without the risk of administrative fines.

What Information Needs Updating?

To maintain compliance, businesses are required to notify the FTA if there are changes in any of the following areas:

• Business Details: Updates to the business name, address, or email.

• Trade License: Changes in the activities listed on the trade license.

• Legal Structure: Adjustments in the legal entity type, partnership agreements, or articles of association.

• Business Nature: Modifications in the core nature of the registrant’s business activities.

• Business Address: Any new address from which the business operates.

Failure to report these changes to the FTA within 20 business days usually results in administrative penalties. However, this grace period provides a penalty-free opportunity for businesses to bring their records up to date.

Benefit of the Grace Period: Penalty-Free Compliance

During this grace period, businesses can update their tax records without incurring penalties. Additionally, if a penalty was imposed on a registrant for failure to update their information from January 1, 2024, until the grace period’s start, the FTA will automatically reverse the penalty and credit the amount back to the taxpayer’s account—no need to reach out to the FTA to request this reversal.

Why This Matters

The grace period is a supportive measure by the FTA to encourage accurate record-keeping and transparency. It’s a valuable opportunity for businesses to maintain compliance without penalty, ensuring they’re up-to-date and aligned with the latest regulations.

For further guidance or assistance in managing your tax record updates, contact ALWAHAT ACCOUNTS & INTERNAL AUDIT SERVICES. We’re here to help you navigate the grace period, stay compliant, and avoid penalties.