The implementation of corporate taxation in the UAE would comply with international standards to guarantee a transparent income taxation process. According to the existing corporation tax framework, failure to meet tax filing deadlines for businesses.
The amendments were introduced by the Ministry of Finance, UAE, in Cabinet Decision No.75/2023, which declared effective on 1st August 2023. These amendments established administrative financial penalties and fines for violations of Federal Decree-Law No. 47/2022 on corporation taxation.
⚠️ Avoid UAE Corporate Tax Penalties Before It’s Too Late
Not sure if your business is fully compliant with UAE Corporate Tax regulations?
UAE Announces Penalty for Late Registration for Corporate Tax
On March 1, 2024, the UAE Ministry of Finance will announce a AED 10,000 late tax filing penalty for registration. This measure, announced on February 27, 2024, aims to ensure timely compliance with the nation’s tax regulations. Corporate firms need to be aware of this change and take action early to avoid the fine.
A taxable person who fails to keep proper records as required by Corporate tax law breaches a penalty of AED 10,000. If a second offense occurs within 24 months of the first, the penalty increases to AED 20,000.
This highlights the importance of compliance with corporate tax documentation standards. Unsure if your records meet FTA requirements? Our corporate tax experts can review your compliance status and help you avoid penalties.
The fine is meant to incentivize taxpayers to abide by the tax code and timely register for corporation tax. The fine amount for late registration for value-added tax and excise tax is the same.
UAE Corporate Tax Violations and Penalties
Maintaining Records and Submitting Information
Penalties for Neglecting to Keep Up Required Documents and Data:
- The penalty for breaking the record-keeping requirements is 10,000 AED for each violation.
- If the violation is committed again in 24 months, the penalty increases to AED 20,000.
A penalty of AED 500 per month applies for late submission of the Declaration to the Authority for the first twelve months. After this period, the penalty increases to AED 1,000 per month or part thereof. Businesses must ensure timely compliance with Declaration submissions to avoid these penalties.
Document Submission in Arabic
- AED 5,000 will be deducted if necessary documentation is not provided in Arabic upon request.
Application for Closing Your Account
- Penalties apply if a Closing application is not submitted within the allotted time.
- Penalties for late corporate tax filing range from 1,000 to 10,000 AED.
Modification of Tax Documents
- Every time a tax record modification is required, the Authority is notified, and there is a penalty of AED 1,000.
- Within 24 months, there is a penalty of AED 5,000 for repeat infractions.
Notifying Legal Representatives and Filing Tax Returns
Penalties Applied to Attorney/Legal Representatives:
- Penalties apply to legal representatives who do not inform of their appointment or file tax returns within the allotted time.
- The initial fines are set at AED 500 for the first twelve months.
- After the thirteenth month, the penalty rises to 1,000 AED.
Resolving Accountable Tax
- For unpaid business tax, a 14% annual penalty is charged monthly, starting the day after the due date. Each month, this penalty is applied on the same day. For voluntary disclosures, the penalty starts 20 business days after submission. For tax assessments, it begins 20 business days after notification.
Violations and Penalties for UAE Corporate Tax
Federal Decree-Law No. 47 of 2022, which is the Corporate Tax Law, and its revisions, Cabinet Decision No. 10 of 2024, are listed in this table along with the corresponding penalties for violating them.
Based on infractions of the Corporate Tax Law and the Tax Procedures Law, the fines are determined by Cabinet Decision No. 75 of 2023.
| No. | Violation Description | Administrative Fine/Penalty in AED |
| 1 | If businesses fail to keep records and necessary information as per the Corporate Tax and Tax Procedures Law, they may face a penalty/fine of AED 10,000 per violation and AED 20,000 for repeat offenses within 24 months. | For each violation, AED 10,000, and for multiple violations, more than 20,000 AED within 24 months. |
| 2 | Not providing information, records, and paperwork in Arabic as requested by the Authority. | AED 5,000 |
| 3 | Failure to submit the closing your account application by the deadline; a fine of AED1,000 each month, up to AED10,000 | AED 1,000 each month, up to AED 10,000 |
| 4 | Failure to notify the Authority of any case necessitating updating tax records | AED1,000 for each infraction, More than AED5,000 for multiple infractions over 24 months |
| 5 | The Legal Representative’s failure to announce their appointment | AED 1,000 (from the personal funds of the Legal Representative) |
| 6 | The Legal Representative’s failure to timely file a tax return, | 500 AED for each month throughout the first 12 months and AED 1,000 monthly after 1st year (from the funds of the Legal Representative) |
| 7 | Failure to file an income tax return on time | AED 500 for the first 12 months and AED 1,000 for each month after the 13th month |
| 8 | Not paying the payable taxes | A 14% annual monthly penalty on the outstanding amount of payable taxes, beginning the day after the payment deadline |
| 9 | Filing an inaccurate Tax Return | AED 500, if it isn’t amended by the deadline |
| 10 | Filing a voluntary disclosure regarding mistakes in a tax return, tax assessment, or application for a refund | A one percent monthly penalty on the tax difference, beginning the day after the applicable tax return, tax refund application, or tax assessment deadline |
| 11 | Failure to submit a voluntary disclosure knowingly about an audit |
|
| 12 | Not providing the Tax Auditor with facilitation | AED 20,000 (from the money of the Person, Legal Representative, or Tax Agent, as appropriate) |
| 13 | Not submitting, or submitting a Declaration | AED 500 after the deadline for each of the first twelve months, AED 1,000 for every month starting in the thirteenth month |
| 14 | Not submitting the corporate tax registration application by the deadline | AED 10,000 |
💡Concerned about any of the penalties listed above?
Even small compliance gaps can trigger FTA fines. Our consultants help businesses identify risks early.
Contact Us
FAQs
How To Avoid Corporation Tax Penalties and Fines?
This strategy places a strong emphasis on the necessity of careful tax administration and compliance to avoid penalties.
How Does a Company Select a Tax Agent?
How To Select the UAE’s Tax Consultant Services?
Meet Abrar Ahmad (MPhil Finance) on Corporate Tax UAE. Leveraging 10+ years of mastery in VAT consulting, accounting, and driving business growth.
