UAE’s Federal Tax Authority (FTA) Eases Corporate Tax Rollout with New Measures

The UAE is continuing to evolve its tax landscape, and the Federal Tax Authority (FTA) has recently introduced important updates aimed at helping businesses adapt smoothly to the new Corporate Tax regime.

Late Corporate Tax Registration? No Penalty — For Now

One of the most significant recent announcements from the FTA came on May 7, 2025: the authority announced a waiver of penalties for late corporate tax registrations. This move is designed to ease the transition into the new tax system by offering businesses a grace period to comply without facing administrative fines.

Here’s how it works: Businesses and certain exempt entities that missed the original registration deadline will avoid penalties if they submit their tax returns or annual statements within seven months from the end of their first tax period. This approach is intended to encourage early compliance while reducing the financial pressure on companies navigating the new tax framework.

What Does This Mean for Businesses?

This initiative shows the UAE government’s commitment to supporting companies during this critical phase of tax reform. It reduces the risk of penalties for those still adjusting their accounting and reporting systems, allowing more time for businesses to get their affairs in order.

Additional Updates From the FTA

Alongside the penalty waiver, the FTA clarified important details regarding corporate tax exemptions for investors in Real Estate Investment Trusts (REITs). Specifically, REITs that qualify as investment funds will enjoy certain tax exemptions, which could make real estate investments more attractive.

Furthermore, the FTA launched a new application through the EmaraTax digital platform to facilitate the registration of family foundations as unincorporated partnerships. This is a welcome development for family businesses seeking streamlined registration processes and greater clarity under the new tax laws.

Staying Informed Is Key

For businesses operating in the UAE, staying updated on these regulatory changes is crucial to ensure compliance and optimize tax strategies. The FTA’s official website (tax.gov.ae) remains the best source for the latest announcements, detailed guidelines, and digital services related to tax in the UAE.

In Summary: The UAE’s FTA is showing flexibility and support by waiving penalties for late corporate tax registration during the first year, clarifying exemptions for real estate investment funds, and enhancing registration options for family foundations. These steps collectively help smooth the transition for businesses adapting to the new corporate tax regime.

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