Reversing Late Registration Penalty

1. Understanding the Penalty Structure

• The penalty for late registration can amount to AED 5,000 for the first occurrence and AED 10,000 for repeated violations.

2. Eligibility for Reversal

• The Federal Tax Authority (FTA) offers a grace period for reversing penalties imposed between January 1, 2024, and the implementation date of the grace period (March 31, 2025) for registrants who fail to update their tax records. If your penalty was incurred during this period and relates to failure to update your registration details, it may be eligible for reversal.

3. Automatic Reversal Process

• Registrants do not need to contact the FTA for the reversal of the penalty; the reversal process will be handled automatically by the FTA if the penalty conditions are met.

4. Steps to Take

• Confirm Eligibility:
  • Ensure that your penalty falls within the specified grace period and is for a legitimate reason (like late registration).
• File Necessary Tax Returns:
  • You must submit your tax return or annual statements within seven months from the end of your first tax period.
• Update Tax Records:
  • If applicable, ensure that all necessary updates to your tax records are made prior to the deadlines specified.

5. Monitoring Status

• After confirming that you meet the criteria for reversal, monitor your tax account to ensure that the penalty amount is correctly adjusted.

Summary

If your AED 10,000 late registration penalty meets the specified criteria for reversal and falls within the grace period, you will not have to take any action beyond ensuring that your registration details are accurate and your returns are filed on time. The FTA will automatically handle any necessary reversals of your penalty.

If your situation does not fit these conditions, you may need to review your penalty assessment further or seek advice on specific circumstances.