Corporate tax penalties in the UAE: registration, filing and payment

UAE corporate tax penalties are set by Cabinet Decision No. 75 of 2023 and imposed by the Federal Tax Authority (FTA). The main ones are AED 10,000 for late registration, AED 500 a month for a late return (AED 1,000 from the 13th month) and 14% a year on unpaid tax, charged monthly. The late registration penalty can be waived if the first return is filed early enough.

Key takeaways

• Corporate tax penalties come from Cabinet Decision No. 75 of 2023, in force since 1 August 2023 and amended from 1 March 2024.
• Late registration costs AED 10,000, waived if the first return or annual declaration is filed within seven months of the end of the first tax period.
• A late return costs AED 500 for each month or part month for 12 months, then AED 1,000 a month.
• Unpaid tax attracts a penalty of 14% a year, charged monthly for each month or part month.
• Correcting an error by voluntary disclosure before an audit costs 1% of the tax difference a month; after an audit notice a fixed 15% is added.

On this page 10 sections

Where the penalties come from

The penalties in this guide are the fixed amounts and rates in the table annexed to Cabinet Decision No. 75 of 2023, imposed by the FTA on top of any tax due.

Corporate tax penalties apply from

1 August 2023

Cabinet Decision No. 75 of 2023, which sets the administrative penalties for Corporate Tax violations, came into effect on 1 August 2023.

Issued on 10 July 2023, the decision was amended by Cabinet Decision No. 10 of 2024, which added the late registration penalty from 1 March 2024. For corporate tax it applies instead of Cabinet Decision No. 40 of 2017, the VAT and excise schedule, under which a late return costs a flat AED 1,000 the first time and AED 2,000 for a repeat within 24 months (see VAT returns and VAT penalties). The corporate tax guides cover the rest of the tax.

The full penalty table

The decision lists 14 penalties. The table follows its order; “a month” means each month or part of a month.

A legal representative is someone legally appointed to act for another, such as a minor’s guardian or a company’s court-appointed bankruptcy trustee. A declaration is a filing the FTA can require under the Corporate Tax Law, for example from certain exempt persons or from the authorised partner of an unincorporated partnership.

Late registration and the waiver

Registering after the FTA’s deadline costs a single fixed penalty, and a separate initiative cancels it for anyone who files the first return quickly enough.

Late registration penalty

AED 10,000

A Taxable Person that does not submit its Corporate Tax registration application within the timeframe set by the Federal Tax Authority is liable to an administrative penalty of AED 10,000.

The Ministry of Finance and the FTA announced the waiver on 29 April 2025 for those who did not apply to register within the deadline. The release gives no end date and no number for the Cabinet Decision behind it. In May 2026 the FTA described the initiative as still running and covering the first tax period only. It said the penalty is waived automatically once the return or declaration is filed in time, with no request needed, and a penalty already paid is credited to the person’s EmaraTax account, where it can settle other tax or be refunded on request.

Late registration waiver

Waiver if first return filed within 7 months of the end of the first Tax Period

Under a Cabinet Decision announced in April 2025, the late Corporate Tax registration penalty is waived, and refunded if already paid, for Taxable Persons and certain Exempt Persons that file their first Tax Return or annual declaration within seven months from the end of their first Tax Period.

The seven months are two months shorter than the filing deadline of nine months after the end of the tax period, so a first return filed in the eighth or ninth month is on time but leaves the AED 10,000 in place. The initiative turns on that date alone, unlike the case-by-case waiver requests described below. Deadlines and steps are covered in registering for corporate tax on time.

Late filing

A late return is charged by the month: the first charge falls on the day after the filing deadline, a new one on the same date each month, and part of a month counts as a whole month.

Late return penalty

AED 500/month (months 1-12); AED 1,000/month (month 13 onwards)

Late filing of a Corporate Tax Return is penalised at AED 500 for each month or part of a month for the first 12 months, then AED 1,000 for each month or part of a month from the 13th month, starting the day after the filing deadline.

When the charge date does not exist in a month, such as the 31st in a 30-day month, that month’s charge falls on its last day, and later charges return to the original date. The decision sets the amounts in AED with no link to the tax due, so the penalty applies to a late return even when it shows no tax to pay, and unpaid tax adds the separate late payment penalty below.

Worked example

Two returns filed late

The delays are illustrations.

1. A return filed 3 months and 10 days after the deadline: charges fall on the day after the deadline and 1, 2 and 3 months later, so 4 charges.
2. Penalty: 4 × AED 500 = AED 2,000.
3. A return filed 13 months and 20 days after the deadline: 14 charges, the first 12 at AED 500 and the 13th and 14th at AED 1,000.
4. Penalty: 12 × AED 500 + 2 × AED 1,000 = AED 6,000 + AED 2,000 = AED 8,000.

Late filing penalties: AED 2,000 and AED 8,000.

What a return contains and how to submit it is covered in filing the corporate tax return.

Late payment: 14% a year, charged monthly

Tax not paid by its due date is charged a penalty every month it stays unpaid, at a rate the decision states as a yearly one.

Late payment penalty

14% per annum, charged monthly

Unpaid Corporate Tax attracts a monthly late-payment penalty at a rate of 14% per year, charged for each month or part of a month on the unsettled amount from the day after the due date and on the same date each month after that.

The decision’s wording, “a monthly penalty of 14% per annum, for each month or part thereof”, does not show how the yearly rate becomes a monthly charge. This site’s late tax payment penalty calculator reads it as one twelfth of 14% of the unpaid tax for each month or part month: our reading, not an FTA statement. The charge is on the unpaid tax, not on earlier penalties.

Worked example

AED 100,000 paid 2 months and 5 days late

The amount and the delay are illustrations, and the monthly charge uses the reading described above.

1. Charges fall on the day after the due date and 1 and 2 months later: 3 charges.
2. One month’s charge: AED 100,000 × 14% ÷ 12 = AED 1,166.67.
3. Three charges: AED 100,000 × 14% × 3 ÷ 12 = AED 3,500.

Late payment penalty on this reading: AED 3,500.

Tax from a disclosure or assessment

Extra tax found later has its own due date for this penalty: 20 business days after a voluntary disclosure is submitted or a tax assessment is received. The 14% rate runs from the day after that date, alongside any penalty for the error itself.

Errors in a return: disclosure before or after an audit

An error that left too little tax in a return costs least when it is corrected by voluntary disclosure before the FTA gives notice of an audit; after that notice, a fixed penalty is added to the monthly one.

A voluntary disclosure is the FTA form for correcting a return, tax assessment or refund application. Article 10 of the Tax Procedures Law makes it compulsory when the error made the tax too low and optional when it made the tax too high. The tax difference is the gap between the tax as calculated and as it should have been.

Penalty with a voluntary disclosure

1% of the tax difference per month

A Taxable Person that corrects an error in a Corporate Tax Return, Tax Assessment or refund application by Voluntary Disclosure pays a penalty of 1% of the tax difference for each month or part of a month from the day after the original due date until the disclosure is submitted.

Penalty without a disclosure before an audit notice

15% fixed + 1% per month

If a Taxable Person does not make a Voluntary Disclosure of an error before being notified of a Tax Audit, it faces a fixed penalty of 15% of the tax difference plus 1% of the tax difference for each month or part of a month from the original due date.

For an error in a refund application or a tax assessment, the 1% runs instead from the day after the application was submitted or the assessment was notified.

The incorrect return itself carries a separate AED 500, which falls away if the return is corrected before the filing deadline.

Deregistration and records

A registrant whose business stops has three months to apply to deregister, and the penalty for missing that deadline grows each month up to a cap.

Late deregistration penalty

AED 1,000 a month, maximum AED 10,000

A Registrant that does not submit a Corporate Tax deregistration application within the required timeframe is penalised AED 1,000 for the late application and AED 1,000 on the same date each month after that, up to a maximum of AED 10,000.

Under FTA Decision No. 6 of 2023, the three months run from the date the business stops, or the date a company ceases to exist, is dissolved or liquidated. At AED 1,000 a charge, the tenth charge reaches the cap. Under Article 52 of the Corporate Tax Law, the FTA does not deregister a taxable person until all tax and penalties are paid and all returns filed, including the one up to the date the business stopped.

Under Article 56 of the Corporate Tax Law, a taxable person keeps the records supporting its returns for seven years after the end of the tax period concerned, and an exempt person keeps the records showing its exempt status for as long. Missing records cost AED 10,000 a violation, or AED 20,000 for a repeat within 24 months.

Asking for a review, a waiver or instalments

A penalty can be challenged by asking the FTA to reconsider its decision, or relieved by asking an FTA committee to waive it or accept it in instalments.

Reconsideration

Reconsideration is the first step for disputing an FTA decision, a penalty included, and the request is made on EmaraTax.

Reconsideration deadline

40 Business Days

A person can ask the FTA to reconsider any decision about it, giving reasons, within 40 Business Days from the date it was notified of the decision; the FTA must decide within 40 Business Days of receiving the request and notify the decision within 5 Business Days.

If the FTA’s answer goes against the person, or does not come in time, the matter can go to the Tax Disputes Resolution Committee (Articles 30 to 32 of the Tax Procedures Law).

Waiver or instalment request

Apart from the late registration initiative, penalties are waived case by case by an FTA committee under Cabinet Decision No. 105 of 2021, normally on the person’s request.

Waiver and instalment requests

Up to 110 business days; instalment plans from AED 50,000

A person can ask the FTA on EmaraTax to pay administrative penalties by instalments or to waive or refund them under Cabinet Decision No. 105 of 2021; the FTA may take up to 110 business days to respond, and penalties paid by instalments must total at least AED 50,000.

Article 4 of the decision sets the conditions for a waiver. The violation must not be connected to tax evasion, the request must be made within the period the committee sets, and the case must be one of these, the first four only where they directly caused the failure:

• death or illness of a registered individual or sole owner
• death, illness or resignation of a key employee
• restrictions or precautionary measures imposed by UAE government authorities
• a general failure of FTA systems, payment gateways or telecoms affecting a group of persons
• a custodial sentence served by the registered person or sole owner
• tax obligations met through another registered person’s account
• insolvency or bankruptcy, with earlier tax settled and not declared to escape the penalties
• any other case the committee assesses

The committee sets the amount waived, in whole or in part, and the same penalties can be the subject of only one request. Instalments cover unsettled penalties only, need the period’s tax to be paid, and are not available while the penalties are before the Tax Disputes Resolution Committee or the courts; a reconsideration request does not block them.

Requests are made on EmaraTax, on the form the FTA provides there; Article 5 of the decision refers to forms the FTA prepares. A request gives the person’s details and tax registration number, the penalties, violations and dates concerned, and the reasons, plus an undertaking: that the violation is corrected and will not be repeated (waiver), or to pay under the approved plan (instalments).