Don’t Miss the Federal Tax Authority's Grace Period
Posted on 06 Jan 2025
As part of its continued efforts to streamline tax compliance, the Federal Tax Authority (FTA) has announced a grace period from 1 January 2024 to 31 March 2025 for businesses and individuals who have fallen behind on updating their tax registration information. This is a crucial opportunity for taxpayers to rectify any discrepancies in their records without facing hefty administrative penalties, which can amount to up to AED 10,000.
Why This Grace Period is Important
The FTA’s decision provides taxpayers with a unique chance to update their tax registration details, such as:
- Business name
- Commercial license activity
- Registered address and email
- Legal structure and partnership agreements
- Nature of business activities
Failure to keep these details updated can lead to serious penalties. The grace period offers a solution for those who have missed the deadline to inform the FTA of any changes to their records, allowing businesses to avoid these costly administrative fines.
Key Benefits of the Grace Period
- Penalty Avoidance: By updating your tax records within the grace period, you can avoid administrative penalties of up to AED 10,000. This is a great opportunity for businesses that have not yet updated their records to get back in compliance without incurring additional costs.
- Penalty Refunds: If you have already paid any penalties for late updates between 1 January 2024 and the grace period’s deadline, you may be eligible for a refund, in line with the Cabinet’s decision on penalty refunds.
- Simplified Compliance: The FTA’s initiative aims to make it easier for businesses to stay on top of their tax obligations and encourage self-compliance with the UAE’s tax laws. By ensuring your information is up to date, you’ll be able to avoid unnecessary complications in the future.
- Enhanced Business Continuity: By keeping your tax records updated, you ensure that your business stays compliant with UAE tax laws, helping you maintain smooth operations and avoid disruptions to your tax status.
What Do You Need to Update?
As per the FTA regulations, you are required to notify the FTA about any changes in your business details within 20 working days of the change. This includes:
- Changes in business activity or the nature of your work
- Updates to your commercial license or legal structure
- Alterations to your business address, email, or contact information
Updating this information promptly ensures that your records are accurate, preventing delays in any future tax or regulatory procedures.
How Can TAG Help You?
At TAG, we understand that tax compliance can be complex, especially when managing your business’s financial details. Our team of experts can assist you in:
- Updating your tax records with the FTA
- Ensuring compliance with UAE tax regulations
- Advising on the implications of tax record changes
- Managing your overall tax and financial obligations
Whether you are a startup or a multinational corporation, TAG offers the guidance and support you need to navigate the complexities of tax procedures in the UAE. Don’t let this grace period pass by! Take advantage of this opportunity to update your tax records, avoid penalties, and ensure continued compliance with the UAE’s tax laws.
Final Thoughts
The FTA’s grace period offers a valuable opportunity for taxpayers to get back on track with their tax obligations, avoid costly penalties, and maintain smooth business operations. Be sure to take action before 31 March 2025 to benefit from this initiative and stay compliant with UAE tax laws.
For more assistance with updating your tax records or other tax-related matters, contact TAG today. Our team is ready to help ensure your business remains compliant and penalty-free in the UAE.
📧 Email: info@tagconsultancy.ae
📞 Phone: +971 (0) 58 518 4291
