In a move similar to the initiative for expired visas, the UAE has now implemented a grace period for taxpayers, allowing them to update their information on record with the tax authorities without facing penalties. Typically, taxpayers are required to report any updates to the tax authority within 20 business days of a relevant event occurring.
Examples of these updates include changes such as a new shareholder or Director, issuance of a new ID, license renewal, amendments to the company’s articles of association, changes in address, and similar occurrences.
Under normal circumstances, failing to update this information within the stipulated timeframe could result in a fine of up to AED 10,000 for each violation. However, to encourage taxpayers to keep their tax records up to date without immediately triggering penalties, the Federal Tax Authority has introduced this grace period initiative. The grace period is effective from January 1, 2024, until March 31, 2025. Any updates made during this period will lead to a suspension of penalties, and if fines have already been imposed, such penalties can be reveresed. In cases where a penalty has already been paid, the tax authority will automatically credit the amount back to the taxpayer.
Similar to the initiative for expired visas, this measure encourages taxpayers and business owners in the UAE to comply with regulations without the immediate burden of heavy fines. It’s a practical tool for promoting compliance while making it easier for business owners to operate.
Therefore, it is highly recommended that businesses review and, if necessary, update their information on file with the tax authority.
