The UAE’s Federal Tax Authority (FTA) has announced a new Cabinet-approved grace period, allowing businesses to update their tax registration information without incurring penalties and taxpayers to update tax registration.
This grace period is available until March 31, 2025, and applies to those who may have fallen behind on their tax record updates.
This initiative is part of the FTA’s ongoing commitment to supporting businesses in meeting their tax obligations efficiently and helping them avoid unnecessary administrative penalties.
Grace Period for Updating Tax Records Without Penalty
The grace period, covering the period from January 1, 2024, to March 31, 2025, gives businesses an opportunity to bring their tax records up-to-date without facing penalties for delays.
This new Decision allows taxpayers to update any necessary tax registration information during this time.
For those who have already been penalized for not updating their records in this period and paid the associated fines, there’s an option to request a penalty refund.
Requests for refunds are processed in accordance with the Penalty Refund Procedures specified in Cabinet Decision No. (105) of 2021 on Controls and Procedures for Waiving and Refunding Administrative Penalties and Paying Administrative Penalties by Instalments.
Which Details Need to Be Updated? – Taxpayers to Update Tax Registration
As part of maintaining accurate records, registered taxpayers must notify the FTA of any updates to their business information within 20 working days of a change, using the FTA’s approved forms and procedures.
This is required under Federal Decree-Law No. (28) of 2022 on Tax Procedures, Executive Regulation, Cabinet Decision No. (74) of 2023.
Key information requiring timely updates includes:
- Business Name and Contact Details: Updates to the name, address, or email address registered with the FTA.
- Business Activities: Any changes to the activities listed in the commercial license, such as new or removed activities.
- Legal and Structural Information: Modifications in the legal form, joint venture agreements, partnership details, or articles of association.
- Business Operations: Changes in the nature of the business or in the locations from which it operates.
These updates help the FTA maintain accurate records, allowing for smoother tax processes and compliance.
Facilitating Compliance and Transparency: FTA’s Statement
The FTA Director General, H.E. Khalid Ali Al Bustani, emphasized the importance of the grace period in promoting compliance among UAE businesses.
“This new Decision aligns with the wise leadership’s directives to implement the tax system to the highest standards, promoting transparency and maintaining economic growth.
It establishes a flexible legislative tax environment that encourages self-compliance and adapts to changing business needs,” said H.E. Al Bustani.
He added that the Decision provides an essential opportunity for registrants to update their tax records, enabling them to avoid administrative penalties.
The FTA is committed to collaborating with businesses to simplify the compliance process and reduce the administrative tax burden on UAE companies.
Supporting UAE’s Economic Growth and Competitiveness
This initiative not only reduces the penalty burden on businesses but also supports the UAE’s broader goal of fostering a tax environment that encourages growth and competitiveness.
By offering a flexible compliance window, the FTA aims to boost transparency in tax processes and create a business-friendly ecosystem that supports the UAE’s economic ambitions.
Accessing More Information and Updates
The FTA has published a detailed clarification on the grace period for tax updates, accessible through its Public Clarifications service on the FTA website at tax.gov.ae.
This service is designed to keep taxpayers informed about technical matters related to taxes, providing clear explanations that enable businesses to fully comply with UAE tax regulations.
Businesses are encouraged to take advantage of this grace period to ensure that their tax records are up-to-date.
The FTA’s initiative reflects a commitment to supporting businesses and building a fair, transparent, and growth-focused tax environment in the UAE.
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