Sets in three tables the fixed and percentage-based administrative penalties the FTA imposes for breaches of the Tax Procedures Law, the Excise Tax Law and the VAT Law, such as late registration, late returns, late payment, record-keeping failures and incorrect invoices; consolidated as amended by Cabinet Decisions No. 49 of 2021, No. 108 of 2021 and No. 129 of 2025.
Cabinet Decision No. 40 of 2017 is the penalty table for VAT, excise tax and the Tax Procedures Law. Every fine the Federal Tax Authority imposes for late registration, late returns, late payment, incorrect returns, missing records or defective invoices in those taxes comes from its three appended tables. It took effect on 24 September 2017 (the excise table from 1 October 2017 and the VAT table from 1 January 2018) and has been amended by Cabinet Decision No. 49 of 2021 (effective 28 June 2021), Cabinet Decision No. 108 of 2021 (effective 1 January 2022) and Cabinet Decision No. 129 of 2025, issued 9 October 2025 and effective from 14 April 2026, which rewrote Table 1 and Table 3. Corporate tax penalties are in Cabinet Decision No. 75 of 2023.
Article 3 confirms a penalty never relieves the person of the tax itself; Article 5 allows objection under the Tax Procedures Law.
Table 1, on the Tax Procedures Law, sets AED 10,000 for failing to keep required records (AED 20,000 for a repeat within 24 months), AED 5,000 for not providing Arabic documents on request, AED 10,000 for late tax registration, AED 1,000 per month up to AED 10,000 for late deregistration, AED 1,000 (AED 5,000 on repeat) for not updating tax record information, AED 1,000 for a first late return and AED 2,000 for a repeat within 24 months, and AED 500 for an incorrect return unless corrected in time or disclosed without a tax difference. Late payment, as revised from 14 April 2026, carries a monthly penalty of 14% per annum on the unpaid tax for each month or part month from the day after the due date; for voluntary disclosures and assessments the due date is 20 business days from submission or receipt. A voluntary disclosure costs 1% per month on the tax difference from the return due date; failing to disclose before an audit notice costs a fixed 15% plus 1% per month until disclosure or assessment. Obstructing a tax auditor costs AED 20,000, failing to account for reverse-charge tax carries the same 14% per annum charge, and failing to calculate tax on imports costs 50% of the undeclared tax.
Table 2, on excise, sets AED 5,000 for not displaying tax-inclusive prices, the higher of AED 50,000 or 50% of the tax for breaching designated zone transfer and storage rules, and AED 5,000 (AED 10,000 on repeat) for not providing price lists. Table 3, on VAT, sets AED 5,000 for not displaying tax-inclusive prices, AED 2,500 for not notifying margin scheme use, the higher of AED 50,000 or 50% of the tax for designated zone breaches, AED 2,500 per detected case for failing to issue a tax invoice or credit note in time, and AED 2,500 per case for breaching the rules on issuing them electronically.
Every person registered or required to register for VAT or excise tax in the UAE, their legal representatives and tax agents, and any person who imports goods or is obliged to keep records or provide documents under the Tax Procedures Law.
| Article 2 | Administrative penalties are imposed for the violations listed in Tables 1, 2 and 3 appended to the decision, covering the Tax Procedures Law, the Excise Tax Law and the VAT Law respectively. |
| Article 3 | Imposing an administrative penalty does not exempt the person from paying the due tax itself under the federal tax laws. |
| Article 5 | A person may object to an administrative penalty under the procedures in Federal Decree-Law No. 28 of 2022 on Tax Procedures. |
| Article 7 | The decision took effect on issue, 24 September 2017, with the excise table effective 1 October 2017 and the VAT table effective 1 January 2018. |
| Table 1, items 1–3 | AED 10,000 for failing to keep required records, rising to AED 20,000 for a repeat within 24 months; AED 5,000 for not providing tax records in Arabic on request; AED 10,000 for failing to register within the statutory timeframe. |
| Table 1, items 4–8 | AED 1,000 per month up to AED 10,000 for late deregistration; AED 1,000 (AED 5,000 on repeat) for not notifying changes to tax record data; AED 1,000 for a first late tax return and AED 2,000 for a repeat within 24 months, payable from a legal representative's own funds where applicable. |
| Table 1, item 9 | Late payment of payable tax carries a monthly penalty of 14% per annum for each month or part month on the unpaid amount from the day after the due date; for voluntary disclosures and tax assessments the due date is 20 business days from submission or receipt (as amended from 14 April 2026). |
| Table 1, items 10–12 | AED 500 for an incorrect return unless corrected within the filing deadline or disclosed without a tax difference; a voluntary disclosure costs 1% per month on the tax difference; failing to disclose before an audit notice costs a fixed 15% of the tax difference plus 1% per month until disclosure or assessment. |
| Table 1, items 13–15 | AED 20,000 for failing to facilitate a tax auditor, payable from the person's, representative's or tax agent's own funds; 14% per annum monthly on reverse-charge tax not accounted for; 50% of unpaid or undeclared tax on imports. |
| Table 2 | Excise: AED 5,000 for not displaying tax-inclusive prices; the higher of AED 50,000 or 50% of the tax chargeable for breaching designated zone transfer, storage and processing rules; AED 5,000 for not providing price lists, AED 10,000 on repeat. |
| Table 3 | VAT: AED 5,000 for not displaying tax-inclusive prices; AED 2,500 for not notifying the FTA of margin scheme use; the higher of AED 50,000 or 50% of the tax for designated zone breaches; AED 2,500 per detected case for late tax invoices or credit notes and for breaching electronic issuance rules (as amended from 14 April 2026). |
The decision is itself the penalty schedule: fixed amounts from AED 500 to AED 20,000 for procedural breaches, AED 10,000 for late registration, percentage penalties of 14% per annum on late-paid tax, 1% per month on voluntarily disclosed tax differences, 15% plus 1% per month for undisclosed differences found on audit, 50% of undeclared import tax, and the higher of AED 50,000 or 50% of the tax for designated zone breaches. Penalties are in addition to the tax and may be objected to under the Tax Procedures Law.
When a client forwards an FTA penalty notice this decision is the first document we open, because the amount on the notice must match a line in one of these tables before we decide whether to pay, request a reconsideration or escalate to the Tax Disputes Resolution Committee. The most common items we see are the AED 10,000 late registration penalty on companies that passed the VAT threshold without noticing, the AED 1,000 and AED 2,000 late return penalties, and the late payment charge on assessed tax. For clients who find an error in an earlier return we quantify the choice between disclosing now at 1% per month and waiting, which exposes them to the fixed 15% once an audit notice arrives. We also brief every registrant on the 14 April 2026 changes to late payment and electronic invoicing penalties, since the arithmetic of a late payment changed with them.
Tax Procedures Law
The common procedural code for all federal taxes: registration, record keeping, returns, voluntary disclosures, FTA audits and assessments, tax agents, administrative pen…
VAT Law
Imposes value added tax at a standard rate of 5% on supplies of goods and services and imports in the UAE from 1 January 2018, with zero-rated and exempt categories, regi…
Excise Tax Law
Imposes excise tax on goods the Cabinet designates as excise goods (tobacco, energy and carbonated drinks, sweetened drinks, electronic smoking devices and liquids) on th…
Tax Penalties Amendment (2025)
Amends the definitions in Article 1 and replaces Tables 1 and 3 of the tax penalties decision, restating the penalties for tax procedures and VAT violations with effect f…
Corporate Tax Penalties Decision
Lists the administrative penalties for corporate tax violations: AED 10,000 for failing to keep records (AED 20,000 on repeat), AED 500 per month rising to AED 1,000 for …
Tax Procedures Executive Regulation
Implements the Tax Procedures Law: which accounting records must be kept and for how long (generally five years, seven for real estate records), form and language of docu…
E-Invoicing Penalties Decision
Fixes the penalties for e-invoicing breaches: AED 5,000 for each month of delay in implementing the system, including failing to appoint an Accredited Service Provider on…
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