FTA Tax Amnesty 2025: How to Avoid Corporate Tax Penalties in the UAE

FTA Tax Amnesty 2025 is a program launched by the Federal Tax Authority of the UAE (FTA), aimed at exempting companies from fines for late registration under the Corporate Tax regime. In 2025, the amnesty has been extended, but it now includes several new conditions and restrictions.

The main goal of the amnesty is to encourage voluntary tax compliance, reduce violations, and give businesses a chance to regularize their activities without financial losses. The government’s aim is not to punish but to streamline registration and reporting — especially important during the transition period following the introduction of corporate tax in 2023.

For companies that failed to register on time, this program offers a real opportunity to avoid significant fines and start 2025 with a clean slate.

The Essence of the FTA Tax Amnesty

The FTA Tax Amnesty 2025 means exemption from the fine for delayed registration if the company voluntarily completes registration and submits its Corporate Tax Return within the shortened timeframe set by the FTA.

This allows businesses to correct previous violations without financial penalties — provided they meet all FTA requirements.

Key Provisions of the Amnesty

1. The amnesty applies to companies whose registration deadline, as set by Federal Tax Authority Decision No. 3 of 2024, has already expired.
2. Companies can benefit from the program if they:

– submit an application for registration with the FTA;

– file their Corporate Tax Return within seven months after the end of their first financial year, as specified in their Corporate Tax Certificate.

These criteria help the FTA distinguish between businesses that deliberately evade taxes and those that missed the deadline due to technical or organizational reasons.

Conditions for Participation in the FTA Tax Amnesty

To benefit from the FTA Tax Amnesty 2025, a company must take two key steps:

1. Submit a registration application for corporate tax before the deadline set by the Federal Tax Authority.
2. Submit the Corporate Tax Return within seven months after the end of the first financial year.

Failure to comply with these deadlines will result in automatic fines, and the company will lose eligibility for the amnesty.

Example

Suppose a company started operations in January 2024 but submitted its registration only in June 2025. After submission, it is registered with the FTA within 5–20 business days. The company’s financial year is January–December, and the standard fine for late registration is AED 10,000.

If the company files its tax return by July 31, 2025, the FTA waives the fine after verifying compliance with the amnesty conditions.

Corporate Tax Penalties in 2025

The extension of the amnesty does not cancel existing penalties. Companies that fail to use the program in time are subject to standard FTA sanctions, which remain strict in 2025.

Main Types of Fines

• Late registration — AED 10,000
• Late filing of the tax return — AED 500 for each month of delay (for the first 12 months) and AED 1,000 per month thereafter
• Incorrect or incomplete return — AED 500 for the incorrect filing and 15 % of the understated tax amount
• Absence of accounting records — up to AED 20,000

These penalties are applied automatically. The FTA uses digital systems to monitor filing deadlines and detect missing reports, so missing an email notification or delaying submission is risky — sanctions apply without prior warning.

Practical Example

A company began operations in November 2023 but registered only in August 2025. In this case, the AED 10,000 fine is applied automatically because the registration was completed after the official deadline.

To avoid additional penalties, the company must promptly file its declaration and notify the FTA about its intention to comply under the amnesty, if still eligible.

Documents Required for Filing a Corporate Tax Return

The Federal Tax Authority of the UAE does not require a full-scale traditional accounting report; however, all figures in the declaration must be substantiated. Even “zero” returns must be supported by numerical evidence of income and expenses.

Mandatory Document Package

1. Certificate of Incorporation and Trade License
2. Passport and Emirates ID of the owner
3. Selection of the tax period (usually the calendar year)
4. Income and expense statement — including zero values
5. Invoices, bank statements, and expense confirmations
6. Proof of economic substance — for example, office lease, utility bills, or photos of the workspace

The FTA carefully checks the validity of all provided data, especially when a zero-profit return is filed. A lack of documentation is treated as a violation, even if the company had no business activity.

Important Notes When Preparing a Return

Submitting a declaration is mandatory for all companies — even those with no income during the reporting period. The absence of profit does not exempt a company from filing obligations.

Additionally, businesses with branches, representative offices, or joint ventures must consolidate their data if they form part of the same corporate group. Misallocating income among branches may result in reassessment and additional fines.

How to Avoid Penalties in the Future

The FTA Tax Amnesty 2025 is a chance to correct mistakes, but the best strategy is to build an accounting system that prevents penalties altogether. Below are key practices to keep your business compliant and minimize risks.

Five Practical Tips

1. Register with the FTA immediately after receiving your license. This is the simplest way to avoid fines for late registration.
2. Appoint a responsible accountant or outsource to a tax consultant.
3. Record income and expenses from day one. Even a manual Excel sheet is better than no records.
4. Use cloud-based accounting systems. Platforms like Zoho Books, QuickBooks, Xero, or First Bit automate reporting and reminders.
5. Regularly check the email linked to your FTA account. Most FTA notifications, including filing reminders, are sent there.

Why You Should Not “Sleep” in the FTA System

Some companies register but fail to file reports. This is considered a more serious violation than not registering at all. The FTA treats such entities as active but non-compliant and imposes penalties automatically.

It is crucial to either submit your returns on time or formally notify the FTA about the suspension of your business activity.

How to Get Help and Meet Deadlines

Many business owners — especially in small and medium enterprises — are unsure which documents to prepare or how to calculate deadlines. In these cases, it is best to seek professional assistance from accountants familiar with the FTA’s requirements.

A qualified accountant or tax advisor can:

– determine whether your company qualifies for the amnesty;

– prepare all necessary documents;

– register the company in the FTA system;

– file the return and follow up until confirmation from the authority.

Consulting an expert saves time and protects your business from unnecessary risks.

Why Your Company Should Use the Amnesty

FTA Tax Amnesty 2025 is more than just a penalty waiver — it is a practical tool for building transparent financial management. It demonstrates that the UAE government supports businesses that act in good faith.

Companies that take advantage of the amnesty gain:

• exemption from past penalties;
• restored compliance reputation with the FTA;
• a clean start under updated regulations;
• simplified future audits and licensing procedures.

However, such opportunities are rare. The FTA is expected to tighten control over tax compliance in the future, and another amnesty is unlikely.

The FTA Tax Amnesty 2025 gives businesses a real opportunity to avoid fines and set up proper tax compliance. If you are unsure whether your company qualifies, it is better to check early.

Registering with the FTA, filing accurate returns, and maintaining systematic records are the foundation of stable business operations in the UAE. The sooner a company brings its tax affairs into order, the stronger its credibility becomes with banks, partners, and the government.