UAE Tax Penalties — Late Filing and Payment
Missing tax deadlines in the UAE can result in significant administrative penalties. Here is what to expect and how to respond.
VAT Penalties
| Violation | Penalty |
|---|---|
| Late VAT return filing | AED 1,000 (first time), AED 2,000 (repeat within 24 months) |
| Late VAT payment | 2% of unpaid VAT immediately + 4% monthly if still unpaid after 7 days |
| Failure to register for VAT | AED 10,000 |
| Failure to issue a tax invoice | AED 2,500 per invoice |
| Failure to maintain records | AED 10,000 (first time), AED 50,000 (repeat) |
Corporate Tax Penalties
| Violation | Penalty |
|---|---|
| Late CT return filing | AED 500/month for first 12 months, AED 1,000/month thereafter |
| Late CT payment | 14% annual rate on unpaid tax |
| Failure to register for CT | AED 10,000 |
| Failure to maintain records | AED 10,000 (first time), AED 50,000 (repeat) |
What to Do If You Have Missed a Deadline
Step 1 — File immediately Late is always better than never. Penalties accrue the longer you wait.
Step 2 — Pay any tax due Pay outstanding VAT or CT as soon as possible to stop penalty interest accruing.
Step 3 — Consider a Voluntary Disclosure If you have made errors in prior returns (not just late filings), a Voluntary Disclosure via EmaraTax may reduce penalties. The FTA's penalty waiver programmes periodically offer relief.
Step 4 — Request a reconsideration (if applicable) You have the right to request a reconsideration of a penalty decision within 40 business days of receiving it.
Kounted helps clients manage penalty situations and coordinates with the FTA on reconsideration applications where appropriate.