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UAE offers grace period for taxpayers to update records, waives penalties paid since January 2024

The new decision also allows violators to make the necessary adjustments and avoid administrative penalties

UAE's Federal Tax Authority (FTA) announced grace period for taxpayers falling behind on updating their tax registration information for the period ending in March 2025.

The new decision has been issued to support businesses in meeting their tax obligations. The grace period is for registrants who have fallen behind on updating their tax records from January 1, 2024, until March 31, 2025.

If penalties were paid between January 1, 2024, and the grace period deadline, they would be refunded. This follows the Penalty Refund Procedures in Cabinet Decision No. (105) of 2021, which outlines the rules for paying, waiving, and refunding administrative penalties.

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The new decision also allows violators to make the necessary adjustments and avoid administrative penalties associated with failure to inform the FTA of any cases that require modifying their tax records.

As per the Cabinet Decision No. (74) of 2023, registered taxpayers must notify the FTA, using the FTA's approved form and process, within 20 working days of any change in the information registered in the FTA systems. This includes the name, address, email, activity listed in the commercial license, legal form, partnership agreement for joint ventures, and articles of association, along with any changes in the nature of the registrant's business or address from which they conduct any of their business activities.

Khalid Ali Al Bustani, director general of the FTA, stressed the importance of the Cabinet Decision, which provides additional facilities for taxpayers and forms part of the FTA's commitment to collaborating and coordinating with businesses to ensure their compliance with tax regulations and laws while helping them avoid administrative penalties.

"The new Decision aligns with the wise leadership's directives to implement the tax system according to the highest standards, designed to ensure transparency, maintain economic momentum, and establish an optimal, flexible legislative tax environment that promotes self-compliance and adapts to evolving circumstances through decisions tailored to current requirements," Al Bustani added.

"The Cabinet Decision provides an opportunity for registrants who have fallen behind on their obligations to update their tax records to do so during the specified grace period," he explained. "This allows them to avoid administrative penalties associated with failure to notify the Federal Tax Authority of any cases that call for an update of their tax records submitted to the Authority's system."

The FTA director general urged registered taxpayers to take advantage of the new decision's benefits, which reduce the tax burden on business sectors, enhance their contribution to national economic growth, encourage taxpayers to meet their obligations and boost the UAE's competitiveness in the business sector.

As part of its ongoing awareness efforts, the Federal Tax Authority issued a clarification on the grace period for updating tax record information, which can be accessed through the Public Clarifications service on the FTA official website at https://tax.gov.ae/en/. This service aims to keep taxpayers informed about all technical matters related to taxes, offering detailed explanations to simplify these concepts and enable taxpayers to comply with tax legislation.

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