UAE Tax Update: FTA Announces Grace Period for Businesses

Fazil

March 8, 2025

Tax in UAE

The Federal Tax Authority (FTA) has announced a grace period for taxpayers who have fallen behind on updating their tax registration information. This initiative, effective from 1 January 2024 until 31 March 2025, aims to help businesses comply with tax regulations without incurring unnecessary penalties. The decision allows taxpayers to update their tax records and avoid administrative penalties for non-compliance.

Why Updating Tax Registration Information is Crucial

Accurate tax registration details are essential for businesses to remain compliant with UAE tax laws. Failure to update information in the EmaraTax portal can lead to issues such as:

Delays in processing tax returns
Incorrect tax assessments
Potential penalties for non-compliance
Complications in VAT and corporate tax filings

By taking advantage of the FTA’s grace period, businesses can ensure that their tax records remain up to date and avoid future complications.

Key Benefits of the Grace Period

The FTA’s grace period provides several advantages for taxpayers, including:

Penalty Relief: Businesses updating their tax information within the specified timeframe can avoid penalties.
Refund of Previously Paid Penalties: Taxpayers who have already paid penalties for failing to update their tax records between 1 January 2024 and the grace period deadline may be eligible for a refund under Cabinet Decision No. (105) of 2021.
Administrative Ease: The process simplifies tax compliance and ensures smooth transactions with the tax authority.
Regulatory Compliance: Helps businesses align with UAE tax laws and maintain accurate financial records.
Reduced Operational Disruptions: Prevents delays in VAT and corporate tax filings that could affect business operations.

Steps to Update Tax Registration Information

To take advantage of the grace period, businesses must follow these steps:

1. Review Current Tax Registration Details

Log in to the EmaraTax portal and verify the accuracy of business details.
Check for discrepancies in trade licenses, Emirates IDs, and business ownership information.
Ensure that business activity, address, and contact details are correctly registered.

2. Gather Required Documents

The following documents may be necessary for updating tax registration details:

Trade License (updated if applicable)
Emirates ID or Passport (for individuals or business owners)
Certificate of Incorporation (for corporate entities)
Proof of Business Address
Updated Articles of Association (if applicable)

3. Submit the Update Application

Use the EmaraTax portal to submit the updated documents.
Ensure all details are correctly entered to avoid delays.
Monitor the status of the update and respond to any additional requests from the FTA.

4. Confirm Compliance Before the Deadline

Businesses should complete the update before March 2025 to benefit from the grace period.
Keeping a record of the updated registration ensures compliance in future tax assessments.

FTA Encourages Compliance

His Excellency Khalid Ali Al Bustani, Director General of the FTA, emphasized that this grace period provides businesses with an opportunity to align their records with tax laws. The initiative aligns with the UAE’s commitment to maintaining a transparent and flexible tax environment while promoting compliance.

The FTA has also issued a public clarification on the grace period, which can be accessed on the FTA official website for more details.

How Gateway Accounting Can Help

At Gateway Accounting, we specialize in tax compliance, VAT filing, and corporate tax advisory. Our experts can assist your business in navigating the tax registration update process, ensuring accuracy and compliance with FTA regulations. Don’t wait until the deadline—contact Gateway Accounting today for expert tax support and seamless compliance!

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Contact Us for Expert Tax Support!

Don’t wait until the deadline—contact Gateway Accounting today for expert tax support and seamless compliance!