Last updated
The late registration penalty for corporate tax is AED 10,000, and a late return costs AED 500 for each month or part of a month in the first 12 months. Unpaid tax carries 14% a year, charged monthly. Source: Federal Tax Authority and Ministry of Finance, Cabinet Decision No. 75 as amended by Cabinet Decision No. 10, checked .
This page covers corporate tax only. VAT penalties are on the VAT penalties page. For the dates that start these penalties, see corporate tax deadlines.
What are the corporate tax penalties in the UAE?
The decision took effect on . The late registration amendment applies from . Amounts are in AED.
| Violation | Penalty |
|---|---|
| Not keeping required records | 10,000 per violation, 20,000 if repeated within 24 months |
| Not giving records in Arabic when asked | 5,000 |
| Late deregistration application | 1,000 and the same date monthly, up to a maximum of 10,000 |
| Not telling the FTA about changes to tax record details | 1,000 first time, 5,000 if repeated within 24 months |
| Legal representative late notifying appointment | 1,000, paid from own funds |
| Legal representative late filing a return | 500 per month or part for the first 12 months, then 1,000 per month or part (own funds) |
| Registrant late filing a tax return | 500 per month or part for the first 12 months, then 1,000 per month or part |
| Not paying payable tax | 14% a year, charged monthly on the unpaid amount, from the day after the due date |
| Incorrect tax return | 500, unless corrected before the filing deadline |
| Voluntary disclosure of errors | 1% per month on the tax difference |
| No voluntary disclosure before being told of an audit | Fixed 15% of the tax difference plus 1% per month on the tax difference |
| Not helping the tax auditor | 20,000 |
| Late or missing declaration by an exempt person | 500 per month or part for the first 12 months, then 1,000 per month or part |
| Late tax registration | 10,000 |
For voluntary disclosures and tax assessments, the payment is due 20 business days after submission or after you receive the assessment.
Source: Ministry of Finance, Cabinet Decision No. 75 on administrative penalties and its amendments, checked .
We could not confirm whether any of these corporate tax amounts changed after the reform of VAT and Tax Procedures penalties. The consolidated text we read shows only the amendment. If a penalty matters to you, check the current rule on the FTA site.
Can the late registration penalty be waived?
The FTA announced a waiver in for the AED 10,000 late registration penalty. It works like this:
- The penalty is waived if the taxable person (or an exempt person required to register) files its first tax return, or annual declaration, within 7 months of the end of the first tax period instead of 9 months.
- It covers late registration penalties from .
- It applies only to the first tax period.
Three cases are covered:
- Registered, penalty unpaid: the penalty is cancelled.
- Registered, penalty paid: the amount is credited to your account.
- Not yet registered: register, then file within 7 months.
By the FTA said more than 68,600 taxable persons had benefited, and it expected more than 91,000 in total. About 22,000 could still apply.
We found no end date for the waiver and could not confirm the Cabinet decision behind it. Check the FTA site before you plan around it.
Source: Federal Tax Authority, late registration penalty waiver announcements of and , checked .
How do I avoid corporate tax penalties?
The cheapest fix is to keep the dates in view. Register on time, close the books soon after year end and prepare the return well before the 9 month mark. Keep your records for 7 years. If you find an error after filing, a voluntary disclosure costs less than being told of an audit first.
You can estimate a charge with the FTA penalty calculator. It is a rough guide, not an FTA assessment.
