The UAE Federal Tax Authority (FTA) has announced the issuance of a new Decision aimed at assisting businesses in effectively fulfilling their tax responsibilities. This initiative introduces a grace period for tax registrants who have not updated their tax records, covering the timeframe from January 1, 2024, to March 31, 2025.
Opportunity for compliance
This measure allows those who have fallen behind to make the necessary updates without facing administrative penalties for failing to notify the FTA about changes that require adjustments to their tax records.
The Cabinet has formally issued the Decision concerning the grace period for administrative penalties for registrants who have neglected to update their tax record information. It specifies that if penalties have been levied against registrants for not updating their records promptly and those registrants have already paid these penalties between January 1, 2024, and the end of the grace period, they will be eligible for a refund. This is in accordance with the Penalty Refund Procedures established in Cabinet Decision No. (105) of 2021, which outlines the Controls and Procedures for Paying Administrative Penalties in Installments, as well as the Waiving and Refunding of Administrative Penalties.
Encouraging record updates
The FTA emphasized that this initiative is designed to motivate registrants to update their tax records. According to Cabinet Decision No. (74) of 2023 regarding the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures, registered taxpayers are required to inform the authority, using the approved form and process, within 20 working days of any change in the information reflected in the FTA’s systems. This includes any alterations to their name, address, email, business activity as listed on their commercial license, legal form, partnership agreements for joint ventures, and articles of association, as well as changes in the nature of their business or the address from which they conduct their operations.
Importance of the initiative
Khalid Ali Al Bustani, director general, FTA, highlighted the significance of the Cabinet Decision, which provides additional support for taxpayers. This initiative is part of the FTA’s dedication to working collaboratively with businesses to ensure compliance with tax regulations and laws while helping them avoid administrative penalties.
Alignment with leadership goals
Al Bustani further noted that the new Decision aligns with the directives of the wise leadership to implement a tax system that meets the highest standards. It aims to ensure transparency, sustain economic momentum, and create an optimal, flexible legislative tax environment that encourages self-compliance and adapts to changing conditions through tailored decisions.
Call to action for taxpayers
Moreover, Al Bustani explained that the Cabinet Decision offers registrants who have missed their obligations a chance to update their tax records during the designated grace period. This helps them avoid the administrative penalties for failing to inform the Federal Tax Authority about necessary updates to their tax records in the Authority’s system.
Benefits for businesses
The FTA Director General also urged registered taxpayers to take full advantage of the benefits provided by the new Decision, which is intended to alleviate the tax burden on businesses, enhance their contributions to national economic growth, encourage compliance with obligations, and strengthen the UAE’s competitive edge in the business sector.
Ongoing awareness efforts
In line with its ongoing efforts to raise awareness, the Federal Tax Authority has issued clarifications regarding the grace period for updating tax record information, available through the Public Clarifications service on the FTA’s official website. Furthermore, this service is designed to keep taxpayers informed about all technical aspects related to taxes, providing detailed explanations to simplify these concepts and enable compliance with tax legislation.
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