UAE tax advisory firm sees growing demand from SMEs and free zone businesses seeking support to secure penalty waiver eligibility

UAE-based tax advisory firm BCL Globiz has reported a significant increase in corporate tax registration and compliance enquiries from small and medium-sized enterprises (SMEs) and free zone businesses as companies race to meet the Federal Tax Authority’s (FTA) July 31 deadline for penalty waiver eligibility.

The growing demand comes as many businesses seek clarity on the FTA’s initiative allowing eligible taxpayers to have the Dh10,000 late corporate tax registration penalty waived. Under the scheme, businesses must file their first corporate tax return within seven months of the end of their first tax period, rather than the standard nine months, to qualify for the waiver.

For companies whose first tax period ended on December 31, 2025, the deadline falls on July 31, 2026.

According to BCL Globiz, many businesses are only now realising that the waiver remains available, even if a penalty has already been issued or paid.

“The closer we get to the deadline, the more enquiries we are receiving from businesses that want to understand whether they still qualify for the waiver and what steps they need to take,” said Nikhil Jain, partner at BCL Globiz.

“Many business owners initially assumed the penalty was final. However, the FTA has created a clear pathway for businesses to regularise their position, provided they meet the filing requirements within the specified timeframe.”

The advisory firm says much of the recent demand is being driven by SMEs, start-ups, and free zone entities seeking support with corporate tax registrations, return preparation, bookkeeping reviews, and free zone qualification assessments.

Based on its experience supporting businesses across the UAE, BCL Globiz has identified several recurring compliance challenges. These include companies assuming that dormant or pre-revenue entities are exempt from filing requirements, businesses incorrectly treating free zone status as an automatic exemption from corporate tax obligations, and organisations attempting to prepare returns using incomplete or unreconciled financial records.

The firm has also observed growing awareness around transfer pricing requirements, particularly among SMEs that may not realise related-party transactions such as shareholder loans, management fees, and intercompany arrangements are subject to disclosure requirements.

While the UAE’s corporate tax framework remains one of the most competitive globally, with a 0 per cent rate on taxable income up to Dh375,000 and a 9 per cent rate above that threshold, compliance obligations continue to be a key area of focus for businesses.

“The waiver initiative reflects the FTA’s broader objective of encouraging early compliance rather than penalising businesses unnecessarily,” Jain added. “Companies that use this opportunity to establish robust accounting, reporting, and filing processes will be better positioned not only for this year’s filing obligations but also for future tax compliance requirements.”

BCL Globiz advises businesses that have received late registration penalties, as well as those that have not yet completed their corporate tax obligations, to review their first tax period end date and assess their eligibility well before the July 31 deadline.

As the deadline approaches, the firm expects compliance activity to remain elevated, with businesses increasingly prioritising registrations, return filings, bookkeeping reviews, and tax advisory support to avoid unnecessary penalties and maintain regulatory compliance.

For more information, visit: www.bcl.ae.

Featured in : BCL Globiz reports surge in corporate tax compliance requests ahead of July 31 FTA deadline