Stay Penalty-Free A Guide to UAE Corporate Tax Compliance and Relief
UAE Corporate Tax Waiver & Penalties Explained: A Must-Read for Businesses
6/30/20253 min read


UAE Corporate Tax Waiver & Penalties Explained: A Must-Read for Businesses
With the rollout of Corporate Tax in the UAE, companies operating across all Emirates—including Sharjah, Abu Dhabi, and Dubai—must comply with the latest tax laws. Non-compliance may lead to severe penalties. However, businesses have the opportunity to benefit from a UAE Corporate Tax Penalty Waiver, offering a second chance to avoid or reduce fines.
AED 10,000 – For not registering with the FTA on time
AED 500 – AED 20,000 – Penalty for late tax filing
AED 1,000 per day – Delay in submitting records requested by FTA
AED 20,000 – Failure to maintain financial documentation
Up to 200% of unpaid tax – For submitting false or incorrect returns
These penalties are applicable across the UAE and may severely impact your business if not addressed.
What Is the UAE Corporate Tax Penalty Waiver?
The UAE Corporate Tax Penalty Waiver Scheme, introduced by the Ministry of Finance and managed by the Federal Tax Authority (FTA), allows businesses to:
Apply for reduction or full waiver of administrative fines
Correct previous errors and delays without facing financial penalties
Ease into compliance, especially during the initial phase of the new tax system
Conditions for Waiver Eligibility
To qualify for the penalty relief, businesses must:
Pay all due corporate taxes on time
File accurate returns before the due date
Use voluntary disclosure to fix errors proactively
Maintain transparency—fraud or false information leads to disqualification
These conditions apply uniformly, whether your business operates in Sharjah, Abu Dhabi, Dubai, or any other Emirate.
Why the Waiver Matters for UAE Businesses
The waiver was launched to support a smooth transition into the UAE’s evolving tax framework. Its objectives include:
Educating businesses on tax compliance
Encouraging voluntary self-correction
Reducing the financial burden on SMEs
Promoting a stable and investor-friendly business environment
Particularly for small and medium enterprises seeking corporate tax services in UAE (Sharjah, Abu Dhabi, and Dubai), this is a critical opportunity to get compliant without penalty.
Real Scenarios That Qualify for the Waiver
FTA may grant waivers in genuine cases such as:
Companies unaware of registration deadlines (especially SMEs)
Errors made during first-time filing
Late tax payments caused by documented financial difficulties
Voluntary corrections submitted before audits or notices
Each case is assessed individually—submit all necessary documentation to strengthen your request.
Step-by-Step: Staying Compliant with UAE Corporate Tax
1. Register Through the EmaraTax Portal
All businesses, even tax-exempt ones, must register.
2. File Tax Returns on Time
Returns must be submitted within 9 months from the end of your financial year.
Example: Financial year ending 31 Dec 2024 → Filing deadline is 30 Sep 2025.
3. Maintain Records for 7 Years
Keep all tax-related documentation, including:
Invoices and receipts
Audited financial statements
Agreements and contracts
4. Voluntary Disclosure
If errors are found, disclose them immediately to avoid heavier penalties.
Already Paid a Fine? Request a Refund
You may request reconsideration of paid penalties under the waiver scheme:
Log into EmaraTax Portal
Select the “Reconsideration” option
Attach supporting evidence (proof of payment, disclosures, etc.)
Submit and track your application status
The FTA’s approval is discretionary—accurate paperwork is vital.
Mistakes to Avoid (Anywhere in the UAE)
Stay alert to the following common compliance failures:
Not registering your business with the FTA
Late filing of returns
Poor or missing financial records
Ignoring official audit requests
Submitting inaccurate or misleading information
These issues are preventable with the right corporate tax services in UAE, especially from reliable providers in Sharjah, Abu Dhabi, and Dubai.
How to Avoid Corporate Tax Penalties in the UAE
Practical tips for business owners:
Register early—even if your business qualifies for 0% tax
Understand your financial year and mark return deadlines
Keep updated books and digital records
Hire licensed tax professionals for guidance
Monitor updates from the Federal Tax Authority
Consistent compliance ensures peace of mind and financial safety across the Emirates.
Partner with Alwahat for Corporate Tax Services in UAE
Alwahat Accounts and Internal Audit Services offers expert corporate tax services in UAE, including:
Corporate Tax registration support
Timely and accurate return filing
Penalty waiver application handling
Recordkeeping and audit preparedness
We serve businesses across all Emirates with a special focus on Sharjah, Dubai, and Abu Dhabi, helping you stay compliant and penalty-free.
📞 Call us: +971 50 132 7005
🌐 Visit: www.alwahataudit.com
📧 Email: info@alwahataudit.com
Your trusted partner in UAE tax compliance.
Disclaimer
This blog is intended for general informational purposes only and should not be considered legal, tax, or financial advice. For case-specific guidance, we recommend consulting a licensed tax advisor or the Federal Tax Authority (FTA). Alwahat Accounts and Internal Audit Services is not liable for any decisions made based on the information provided above.
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Faisal 2 Bldg, Office No 203, King Faisal St, Al Nad- Al Qasimia, Sharjah, UAE
Level 17, World Trade Center, Khalifa Bin Zayed, the first street- Abudhabi
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4th Floor, AWR Properties - Al Fahidi Heights Office Tower, beside Central Mall ,near Sharaf DG metro station exit 4,Dubai ,U.A.E
Contacts
info@alwahataudit.com
+971589373943
We empower you to make well-informed decisions and successfully attain your financial objectives.


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