Dubai: The UAE has just given a big break to businesses by not charging them administrative fines for delays in registering for corporate tax. That’s not all – the authorities have also decided to refund all those businesses who had already been fined for not meeting their registration deadlines.

Those businesses are now talking about how soon they could get those refunds back. The admin penalty for late registration are Dh10,000.

This would be a huge relief for single individual or freelancer run businesses. Such entities had to register for tax before end March, and based on market feedback, some of them might have failed to make the cut.

For such businesses, any relief or refund from a penalty would be of great use.

“The modality for refunds will come out soon,” said Girish Chand, Senior Partner at the tax consultancy MCA. “Based on past experience of such penalty reversals, the penalty already paid could be automatically reversed.

“This refund could be available for adjustment against the company’s corporate tax liability.”

The UAE Federal Tax Authority has over the recent past gone out of its way to hand-hold businesses through the process of registering for corporate tax as per deadlines. Constant reminders have been issued to get businesses – whether they are on the mainland, in free zones, or owned by freelancers – submit all the documentation through the Emaratax portal.

For refunds on paid admin penalties, “We believe the bank details (of impacted businesses) must be updated in their tax profile on Emaratax portal,” said Mushtaq Khatri, CEO of mkACE Management Consultancy.

“The FTA has confirmed those businesses who paid the Dh10,000 penalty but meet the waiver conditions will be refunded.

“The FTA may need the taxpayer to apply for the refund, and the FTA may review the case before releasing the funds. Clarifications on the procedure to get the refund are awaited.”

To qualify for the penalty waiver, eligible businesses must file their tax return or annual statements ‘within a period not exceeding seven months from the end of their first tax period’.

This ‘aims to encourage registrants to file tax returns or annual statements before the deadline, bolstering early compliance with legal requirements’, said a statement.

“Many business entities in UAE were slapped with a penalty for not registering for corporate tax on time,” said a tax consultant. “To qualify for a waiver, eligible companies must file their corporate tax returns or annual statements within 7 months from the end of their first tax period.”