Federal Tax Authority Urges Registrants to Update Tax Records Before March 2025 to Avoid Penalties

Written By Akshaya Ashok, Reviewed By Reyees K P

Published on 13/02/2025

The UAE’s Federal Tax Authority (FTA) has called on all registrants to take advantage of a grace period to update their tax records without incurring administrative penalties. The grace period, which runs from 1 January 2024 to 31 March 2025, is part of a UAE Cabinet decision aimed at reducing the tax burden on businesses and encouraging compliance with tax obligations.

This initiative reflects the UAE leadership’s commitment to supporting the business sector, enhancing the country’s competitiveness, and fostering a business-friendly environment.

Highlights of the Grace Period

• No Penalties for Updates: Registrants can update their tax records during the grace period without facing administrative penalties for failing to inform the FTA of changes.
• Automatic Reversal of Penalties: If a penalty was imposed between 1 January 2024 and the start of the grace period, it will be automatically reversed. This reversal can be made without registrants contacting the FTA.
• Deadline: The grace period ends on 31 March 2025, after which standard penalties will apply for non-compliance.
  

What Information Needs to be Updated?

According to Cabinet Decision No. 74 of 2023, registrants must notify the FTA within 20 business days of any changes to their tax records. This includes updates to:

• Business name and address
• Email address
• Trade licence activities
• Legal entity type
• Partnership agreements (for unincorporated partnerships)
• Articles of association or equivalent documents
• Nature of business
• Business addresses

Why is this Important?

Updating your tax records ensures compliance with UAE tax laws and helps avoid unnecessary penalties. The FTA’s grace period provides a unique opportunity for businesses to review and update their information without the fear of fines, making it easier to meet regulatory requirements.

How to Stay Informed?

The FTA has published a public clarification on the grace period, which can be accessed through the Public Clarifications service on the FTA’s official website: https://tax.gov.ae/en/. This resource provides detailed explanations of tax obligations and simplifies complex concepts, helping taxpayers comply with UAE tax legislation.

Take Action Now

Don’t wait until the last minute! Use this grace period to review and update your tax records before the 31 March 2025 deadline. By doing so, you can avoid penalties and ensure your business remains compliant with UAE tax regulations.

How Reyson Badger Help?

At Reyson Badger, we specialize in providing expert tax advisory services to help businesses navigate the complexities of UAE tax laws. Our team can assist you in:

• Reviewing and updating your tax records
• Ensuring compliance with FTA regulations
• Avoiding penalties and optimizing your tax obligations

Contact us today to take advantage of the grace period and secure your business’s compliance.

Written By

Akshaya Ashok

Akshaya Ashok is a content writer specializing in creating content focused on accounting and auditing. With over two years of experience, she has developed expertise in crafting professional content for the financial sector.