The Federal Tax Authority has announced a new initiative to waive penalties for businesses that missed the corporate tax (CT) registration deadline, offering a second chance for eligible companies to come into compliance. The update also clarifies several important VAT rules affecting high-value trades and digital commerce.
Key Updates
The most significant change is the penalty waiver initiative from the UAE Ministry of Finance and FTA. If your business failed to register for CT on time, you may be eligible for this relief—a valuable opportunity to regularize your tax status without facing financial penalties. Registrations to date show strong uptake across all three tax streams: 537,340 under CT, 510,940 for VAT, and 1,756 for excise tax.
On the VAT front, businesses dealing in precious metals and jewellery must note the expanded reverse charge mechanism. Supplies of gold, silver, palladium, platinum, and covered stones (including diamonds, rubies, sapphires, and emeralds) now trigger reverse charge rules when their value exceeds other components. This changes your VAT compliance obligations if you trade in these categories.
The FTA also clarified that cryptocurrency mining for personal account is not a taxable VAT supply, since rewards come directly from the network rather than a customer transaction. However, any VAT paid on related expenses (equipment, utilities) cannot be recovered.
Additionally, the authority introduced clearer rules on digital platform liability: if an online marketplace facilitates sales by non-resident or unregistered suppliers, the platform itself may become liable for VAT collection.
What this means
- If you missed the CT registration deadline, contact your tax advisor or the FTA immediately to explore eligibility for the penalty waiver. This window should be treated as urgent.
- Precious metals and jewellery traders must review your VAT compliance procedures to ensure reverse charge rules are properly applied to relevant supplies.
- E-commerce and marketplace operators should audit their current VAT setup, particularly if you work with international or informal suppliers, as new platform liability rules may affect your registration and collection responsibilities.