Federal Tax Authority Introduces Grace Period For Updating Tax Registration Records Until March 2025

The Federal Tax Authority (FTA) has introduced a new Decision to assist businesses in fulfilling their tax duties efficiently. This initiative offers a grace period for tax registrants who have not updated their tax records, covering the timeframe from 1 January 2024 to 31 March 2025. This measure allows violators to make necessary changes and avoid penalties for failing to notify the FTA about required updates.

The Cabinet issued this Decision, which provides a grace period for administrative penalties for those who haven't updated their tax information. If penalties were imposed on registrants during this time and they paid them between 1 January 2024 and the grace period's end, these penalties will be refunded. This is in accordance with Cabinet Decision No. (105) of 2021 regarding Penalty Refund Procedures.

Khalid Ali Al Bustani, Director General of the FTA, highlighted the significance of this Cabinet Decision. It offers additional support for taxpayers and aligns with the FTA's dedication to working with businesses to ensure compliance with tax laws while helping them avoid penalties. "The new Decision aligns with the wise leadership’s directives to implement the tax system according to the highest standards," Al Bustani stated.

According to Cabinet Decision No. (74) of 2023 on the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures, registered taxpayers must inform the authority within 20 working days of any changes in their registered information using an approved form and process. This includes changes in name, address, email, business activity, legal form, partnership agreements, articles of association, or business address.

The FTA aims to motivate registrants to update their records by clarifying that taxpayers must notify any changes promptly. The Director General urged taxpayers to utilise this opportunity provided by the new Decision. It reduces the tax burden on businesses, enhances their role in national economic growth, encourages compliance, and boosts UAE's competitiveness in business sectors.

The FTA has also issued a clarification regarding this grace period through its Public Clarifications service available on its official website. This service helps keep taxpayers informed about technical tax matters by offering detailed explanations that simplify these concepts and enable compliance with tax legislation.

"The Cabinet Decision provides an opportunity for registrants who have fallen behind on their obligations to update their tax records during the specified grace period," Al Bustani explained. "This allows them to avoid administrative penalties associated with failure to notify the Federal Tax Authority."

This initiative reflects efforts towards transparency and maintaining economic momentum by establishing a flexible legislative environment that promotes self-compliance and adapts to changing circumstances through tailored decisions.

With inputs from WAM