The penalties it uses
| What is late | Penalty |
|---|
| VAT or corporate tax registration | AED 10,000 (corporate tax: waived if the first return is filed within 7 months of the first tax period) |
| VAT return | AED 1,000; AED 2,000 for a repeat within 24 months |
| Corporate tax return | AED 500 a month for 12 months, then AED 1,000 a month |
| VAT or corporate tax payment | 14% a year on the unpaid tax, charged monthly |
| An error, disclosed voluntarily | 1% of the tax difference a month |
| An error the FTA finds first | 15% of the tax difference, plus 1% a month |
“A month” means each month or part of a month. VAT penalties follow Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025, in force since 14 April 2026; corporate tax penalties follow Cabinet Decision No. 75 of 2023 as amended.
What stops the clock
Filing a late return and paying what is due stops the monthly penalties from growing, and a voluntary disclosure before the FTA notifies an audit keeps an error at 1% a month rather than 15% plus 1%. See also our corporate tax deadline finder.
Questions people ask
What is the penalty for late VAT registration in the UAE?
AED 10,000. The FTA can also register the business from the date it should have registered, and VAT is then due on the sales made since.
What is the penalty for a late VAT return?
AED 1,000 the first time, and AED 2,000 for each repeat within 24 months.
What is the penalty for paying VAT or corporate tax late?
Since 14 April 2026, 14% a year on the unpaid tax, charged monthly for each month or part of a month from the day after the due date. It replaced the old 2% plus 4% a month.
What is the penalty for a late corporate tax return?
AED 500 for each month or part of a month for the first 12 months, then AED 1,000 a month after that.
Is the AED 10,000 late corporate tax registration penalty waived?
Yes, if the first corporate tax return is filed within 7 months of the end of the first tax period. The waiver covers the first tax period only.
Should I disclose an error in a past return?
A voluntary disclosure costs 1% of the tax difference for each month or part of a month. If the FTA finds the error first, after notifying an audit, it is 15% plus 1% a month.
A guide to the general rules, not tax advice for your business. Your figures stay in your browser: nothing you type here is sent to us unless you choose to message us.
