Grace period to update and rectify tax records

The Federal Tax Authority (FTA) has introduced a grace period for UAE tax registrants to update their tax records without facing administrative penalties. This is a significant relief measure aimed at encouraging compliance and ensuring the accuracy of tax records.

Download here the PDF with this information.

Grace Period Window

• Registrants can amend their tax records with the FTA between 1 January 2024 and 31 March 2025 without incurring any administrative penalties.

Penalty Reversals

• In case penalties have already been imposed for failing to update tax records on or after 01 January 2024, these will be automatically reversed during the grace period. Registrants do not need to apply for the reversal, as the process will be handled automatically by the FTA.
• Furthermore, in case a taxable person has already settled the administrative penalty, the FTA credit the penalty amount to the taxable person’s EmaraTax account.

Events Requiring Tax Record Updates

• Registrants must inform the FTA of any event that necessitates changes in their tax records, including changes in name, address, or contact details; updates to trade license activities; alterations in the legal entity type or changes in partnership agreements; changes in the nature or location of the business.
• Failure to update the FTA within 20 business days of such changes typically results in penalties, but the grace period provides an extended opportunity for correction.

For more information on how this impacts your business or for assistance with updates, contact us today.