The UAE Federal Tax Authority (FTA) has announced a grace period for tax registrants who have fallen behind on updating their tax records, aiming to support businesses in maintaining compliance and avoiding penalties. The grace period applies from January 1, 2024, to March 31, 2025, providing an opportunity for businesses to adjust their tax records without incurring administrative penalties.
Under the new Cabinet Decision, registrants who faced penalties for not updating their information in the required timeframe and paid these fines between January 1, 2024, and the end of the grace period may be eligible for a refund. This aligns with Cabinet Decision No. (105) of 2021, which outlines the procedures for paying, waiving, and refunding administrative penalties.
The initiative encourages taxpayers to notify the FTA within 20 working days of any changes in their registered information, including business name, address, email, legal form, and activity listed in the commercial license. The FTA emphasized that prompt updates are crucial for regulatory compliance and noted that the penalty refund process will be managed in line with existing legislation.
Khalid Ali Al Bustani, Director General of the FTA, highlighted that the grace period aligns with the UAE’s commitment to a transparent and adaptable tax system, fostering a supportive environment for businesses. He encouraged registrants to use this period to update their records, reduce their tax burden, and contribute to the UAE's economic growth.
The FTA has also issued a public clarification available on its website to help taxpayers understand the grace period and provide detailed explanations of related tax concepts.
