The UAE Federal Tax Authority has warned companies and business owners that failing to submit a corporate tax registration application within the statutory deadline will result in an administrative penalty of AED 10,000. At the same time, certain taxpayers may qualify for a waiver of the penalty if they meet specified conditions.

Under UAE tax regulations, resident juridical persons incorporated or otherwise established on or after 1 March 2024 must apply for a tax registration number within three months of their incorporation or establishment date. This requirement also applies to companies operating in free zones.

Operating in a free zone does not automatically exempt a company from registration or tax return filing requirements. A Qualifying Free Zone Person may benefit from a 0% rate on Qualifying Income but must still register and file tax returns in accordance with the regulations. Income that does not meet the qualifying conditions is generally subject to a 9% tax rate.

Natural persons are also required to register for corporate tax if they conduct business activities in the UAE and their total business turnover exceeds AED 1 million in a calendar year. Salaries, personal investment income and real estate investment income earned by natural persons are not included when calculating this threshold.

The Federal Tax Authority stressed that total sales or business revenue should not be confused with taxable income. For most taxpayers, the first AED 375,000 of taxable income is subject to a 0% rate, while any amount above that threshold is taxed at 9%.

In addition to registering, taxpayers must file their tax returns and settle any tax payable within nine months of the end of the relevant tax period. Accordingly, companies and taxpayers whose financial year ended on 31 December 2025 have until 30 September 2026 to file their returns and pay the tax due.

This deadline also applies to businesses claiming Small Business Relief. The relief does not remove the obligation to register or file a tax return, and eligible businesses must submit a simplified return and the required supporting documents by the deadline.

Despite the AED 10,000 penalty, the Federal Tax Authority has introduced a waiver scheme for taxpayers who registered late. The main condition is that the first tax return must be filed within seven months of the end of the first tax period. The relief applies to taxpayers who have not yet registered, those who have already been issued a penalty and even those who have paid it.

If the conditions are met, the waiver will be applied automatically, with no separate application required. If the penalty has already been paid, AED 10,000 will be credited to the taxpayer’s tax account and may be used to settle other liabilities or claimed as a refund.

Registration, tax return filing and tax payments are completed through the EmaraTax platform. The Federal Tax Authority has also urged businesses to retain accounting records, invoices, contracts and documents supporting the figures reported in their tax returns for at least seven years.