Quick Answer
UAE Corporate Tax penalties run from AED 500 for an incorrect return to AED 20,000 for obstructing a tax audit, with late registration fixed at AED 10,000 and late payment charged at 14% per year, applied monthly, on whatever tax remains unpaid. Every figure sits in one instrument, Cabinet Decision No. 75 of 2023 as amended by Cabinet Decision No. 10 of 2024, and total penalties from a single tax assessment cannot legally exceed 200% of the tax actually due. A second decision, Cabinet Decision No. 129 of 2025, took effect on 14 April 2026 and brought VAT and Excise Tax penalty rates into line with the Corporate Tax figures below, but it does not change the Corporate Tax numbers themselves. This guide sets out the complete schedule, not just the late registration fine.
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What Counts as a Corporate Tax Violation
Every administrative penalty under UAE Corporate Tax traces back to a specific, named violation in Cabinet Decision No. 75 of 2023 on Administrative Penalties for Violations Related to the Application of Federal Decree-Law No. 47 of 2022. There is no general “non-compliance” fine. The Federal Tax Authority assesses a penalty only when a taxable person triggers one of the violations listed in the schedule below, and the amount is fixed by that specific violation, not by how the auditor feels about the file.
Fourteen distinct violations carry a Corporate Tax administrative penalty. Twelve of them are captured in the table that follows. Voluntary disclosure penalties and the criminal offence of tax evasion are broken out separately further down, because both work differently from a flat or capped fine.
The Full Corporate Tax Penalty Schedule
| Violation | Penalty amount |
|---|---|
| Failure to register for Corporate Tax by the applicable deadline | AED 10,000, flat |
| Failure to submit a deregistration application on time | AED 1,000 on the first month, plus AED 1,000 for each further month, capped at AED 10,000 |
| Failure to keep the accounting records and commercial books required by law | AED 10,000 for a first violation, AED 20,000 for a repeat violation within 24 months |
| Failure to submit data, records or documents in Arabic when the Authority requests them | AED 5,000 |
| Failure to inform the Authority of information that requires an amendment to submitted tax records | AED 1,000 for a first violation, AED 5,000 for a repeat violation within 24 months |
| A legal representative’s failure to notify the Authority of its appointment within the required timeframe | AED 1,000, charged to the representative personally |
| Late submission of a Corporate Tax return or annual declaration | AED 500 per month for the first 12 months, AED 1,000 per month from month 13 onward |
| A legal representative’s failure to file a return on the taxable person’s behalf within the required timeframe | Same AED 500 / AED 1,000 monthly structure, charged to the representative personally |
| Late payment of assessed Corporate Tax | 14% per year, applied for each month or part of a month the tax stays unpaid |
| Submitting an incorrect tax return | AED 500, waived if corrected before the filing deadline expires |
| Failure to facilitate the work of an FTA tax auditor | AED 20,000 |
| Tax evasion (a criminal offence under the Tax Procedures Law, not an administrative penalty) | A fine of one to three times the evaded tax, and/or imprisonment |
Two things stand out in that list. First, registration and record-keeping are the only two violations with no monthly escalation, which makes them the cheapest mistakes to fix quickly and the most expensive to leave unaddressed for years. Second, tax evasion sits outside the administrative schedule entirely. It is a criminal matter under the Tax Procedures Law (Federal Decree-Law No. 28 of 2022), heard separately from an ordinary penalty dispute, and paying the criminal fine does not cancel the underlying tax or the administrative penalties that still apply on top of it.
Late Registration Penalty in Detail
A taxable person that misses its Corporate Tax registration deadline faces a flat AED 10,000 penalty under Cabinet Decision No. 10 of 2024, regardless of whether any tax is actually owed for the period. Registration deadlines run from incorporation date, financial year end, or nexus date depending on entity type, and a separate seven-month filing waiver can still cancel the AED 10,000 charge for taxable persons who file their first return early enough. Because this single penalty carries its own deadline table, waiver mechanics and worked timeline, we cover it in full in a dedicated guide on the AED 10,000 late registration penalty, including the registration penalty waiver conditions. This article treats registration as one line in the wider schedule; that guide is the place to check your specific waiver window. Registration itself is completed through the process described on our Corporate Tax registration page.
Late Filing Penalty in Detail
Missing the Corporate Tax return deadline costs AED 500 for each month of delay across the first 12 months, then AED 1,000 per month from the 13th month onward. A business that files eight months late owes AED 4,000. One that files 15 months late owes AED 6,000 for the first 12 months plus AED 2,000 for the following two months, AED 8,000 in total, and the clock keeps running until the return is actually submitted. Filing deadlines are period-specific, generally nine months from the end of the relevant tax period, so the exact due date depends on each business’s own financial year end rather than one fixed calendar date. Whether filing is mandatory for a given entity, and what the standard nine-month deadline looks like against a specific tax period, is covered on our Corporate Tax return filing obligations page, and the filing process itself runs through Corporate Tax return filing.
Late Payment Penalty in Detail
Unpaid Corporate Tax accrues at 14% per year, applied monthly on whatever balance remains outstanding from the day after the due date. The rate is annual but the charge is monthly, so any part of a month counts as a full month for calculation purposes. This is the one penalty in the schedule with no fixed ceiling of its own; it keeps accruing until the tax is paid, subject only to the overall 200% statutory cap described below.
Record-Keeping Penalty in Detail
Corporate Tax requires records to be kept for 7 years from the end of the relevant tax period, not the 5-year period that applied under older VAT-era guidance. A first failure to maintain adequate records costs AED 10,000. A repeat failure within 24 months of the first doubles it to AED 20,000, meaning a business that gets caught twice in two years is already AED 30,000 out of pocket before any tax adjustment is even discussed. Requests for records in Arabic carry a separate AED 5,000 penalty if the business cannot produce them when the Authority asks.
Voluntary Disclosure Penalty in Detail
A taxable person that finds its own error and corrects it through a voluntary disclosure, before the Authority notifies it of an audit, pays 1% per month on the tax difference, counted from the original due date until the disclosure is filed. Correct the same error only after an audit notification arrives, or not at all until the Authority finds it, and the penalty jumps to a fixed 15% of the tax difference plus the same 1% monthly charge. The gap between those two outcomes is the entire argument for disclosing early: on a AED 100,000 understatement corrected six months late through voluntary disclosure, the penalty is AED 6,000. Left for the Authority to find at the same six-month mark, it is AED 15,000 plus AED 6,000, AED 21,000, more than three times as much for the identical error.
Worked Example: Calculating a Late Payment Penalty
A company owes AED 200,000 in Corporate Tax, due on 30 September. It does not pay until 10 January, four months and 10 days later. Because any part of a month counts as a full month, the Authority charges four full months of the 14% annual rate.
- Monthly rate: 14% divided by 12 months, approximately 1.1667% per month
- Months chargeable: 4 (the partial 10th day rounds up to a full fourth month)
- Penalty: 4 x 1.1667% x AED 200,000 = approximately AED 9,333
That AED 9,333 sits on top of the AED 200,000 tax itself, and continues to grow at roughly AED 2,333 per additional month until the balance is cleared. Businesses that expect a cash flow gap around a filing deadline are better off filing the return on time and paying what they can, since the late filing penalty and the late payment penalty are assessed independently of each other and both keep running in parallel.
The 200% Statutory Cap
Article 24(4) of the Tax Procedures Law puts a ceiling on how much a single tax assessment can cost in penalties: total administrative penalties arising from one assessment cannot exceed 200% of the due tax itself. In practice this matters most to businesses that stack several violations from the same period, such as late filing plus late payment plus a record-keeping failure discovered in the same audit. The individual penalties are still calculated and added up as shown in the schedule above, but the combined bill is cut back to the 200% ceiling if the arithmetic total would otherwise exceed it.
Cabinet Decision No. 129 of 2025: What Changed and What Did Not
Cabinet Decision No. 129 of 2025 took effect on 14 April 2026 and rewrote the VAT and Excise Tax penalty framework that had stood since Cabinet Decision No. 108 of 2021. Its purpose was to bring VAT and Excise Tax penalty rates in line with the Corporate Tax figures that had already applied under Cabinet Decision No. 75 of 2023, for example moving the VAT and Excise Tax late payment charge to the same 14% annual rate, and the voluntary disclosure charge to the same 1% monthly rate, that Corporate Tax had used since 2023.
For a Corporate Tax taxpayer specifically, this reform changes very little, because Corporate Tax penalties were the benchmark the other two taxes were harmonized against, not the side being amended. Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024, remains the instrument that governs every figure in the schedule above. The practical effect of the 2026 reform is that all three federal taxes, Corporate Tax, VAT and Excise Tax, now run on the same monthly-accrual logic and largely the same rates, which simplifies compliance for businesses registered for more than one tax but does not itself change what a Corporate Tax violation costs. VAT and Excise Tax penalties specifically are covered in more depth in our VAT penalty guide and on our Excise Tax penalty page.
How to Reduce or Appeal a Corporate Tax Penalty
Three routes exist once a penalty has been assessed or is about to be. First, voluntary disclosure before any audit notification cuts a discovered error’s penalty from 15% plus 1% monthly down to 1% monthly alone, the single largest lever a business controls directly. Second, a penalty already issued can be challenged through a reconsideration request filed with the Federal Tax Authority within the statutory window, and our reconsideration request guide sets out that process step by step. Third, where a reconsideration request is rejected or the dispute is more substantial, formal tax dispute resolution channels are available through our tax dispute services. None of these routes waive a penalty automatically. Each requires a specific filing, within a specific deadline, built on a specific factual and legal argument, which is why businesses facing a penalty above a few thousand dirhams generally get more value from a professional review than from paying and moving on.
Frequently Asked Questions
What is the maximum Corporate Tax penalty a business can face?
There is no single maximum figure, because most penalties accrue monthly and continue until the underlying failure is fixed. The one hard ceiling is the 200% statutory cap on total penalties arising from a single tax assessment, under Article 24(4) of the Tax Procedures Law.
Does the AED 10,000 late registration penalty apply on top of the late filing penalty?
Yes. Late registration and late filing are separate violations under Cabinet Decision No. 75 of 2023, and both are charged independently if a business is late on both. A business that registers late and then also files late can owe the AED 10,000 registration penalty plus the AED 500 to AED 1,000 per month filing penalty at the same time.
Can a Corporate Tax penalty be waived entirely?
Some penalties can be avoided through timely action, such as correcting an incorrect return before the deadline expires to avoid the AED 500 charge, or filing a voluntary disclosure to reduce a tax difference penalty. A separate, narrower waiver also exists specifically for the AED 10,000 late registration penalty, tied to how quickly the first return is filed. Outright cancellation of an already-assessed penalty generally requires a successful reconsideration request rather than an automatic waiver.
How is the 14% late payment penalty actually applied, annually or monthly?
Both. The rate is fixed at 14% per year, but it is charged in monthly instalments, with any part of a month treated as a full month. A balance paid five days into a new month is charged for that entire month.
Is tax evasion the same thing as a late filing or late payment penalty?
No. Late filing and late payment are administrative penalties, fixed amounts or percentages set out in Cabinet Decision No. 75 of 2023. Tax evasion is a criminal offence under the Tax Procedures Law, involving deliberate concealment or falsification, and carries a fine of one to three times the evaded tax plus possible imprisonment, on top of the tax and administrative penalties still owed.
Do VAT and Excise Tax penalties work the same way as Corporate Tax penalties now?
Largely yes, since Cabinet Decision No. 129 of 2025 took effect on 14 April 2026 and aligned VAT and Excise Tax late payment and voluntary disclosure rates with the figures Corporate Tax already used. The underlying laws and specific violation lists still differ by tax type, so always confirm the applicable schedule for the tax in question rather than assuming a figure carries across automatically.
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How Tax Consultant Dubai Can Help
Working through fourteen different violation categories, a monthly-accrual late payment charge, and a separate criminal evasion regime is not something most finance teams want to do while also running a business. Our team calculates exactly which penalties apply to your specific facts, checks whether a voluntary disclosure would reduce your exposure before the Authority does it for you, and prepares reconsideration requests where a penalty has already been assessed incorrectly.
Contact Tax Consultant Dubai today for a penalty exposure review before your next filing or payment deadline.
