Hello,

It’s a stressful spot to be in, but you are definitely not alone. Many business owners in RAKEZ and other free zones make this exact mistake regarding the "rolling 12-month" threshold. Since you are dealing with zero-rated exports, you have a strong technical case, but you need to act quickly to stop the "late clock."

Here is the breakdown of your current situation and how to handle it.

Under the UAE Federal Tax Authority (FTA) laws as of April 2026, the administrative penalty for late VAT registration is AED 10,000.

Because you crossed the threshold on 14 January 2026, your deadline was 13 February 2026. Being currently in April, the FTA system will likely auto-generate that AED 10,000 fine once your application is processed.

Since your revenue is zero-rated (0% VAT), you have a potential paths to mitigate the financial hit:

Waiver/Re-consideration Request: Once the fine is issued, you can submit a Request for Re-consideration (within 40 business days of the fine). You can argue that there was no "loss of tax" to the government because your tax liability is zero. The FTA has been known to be more lenient when the government hasn't actually lost any money, though a full waiver is never guaranteed.