UAE Corporate Tax penalties are set out in Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024. Most of them are fixed amounts or monthly charges that start the day after a deadline is missed, so they can add up quickly. The good news is that almost all of them are avoidable with good planning.

This guide lists the main penalties, explains when each one applies, and shows how to avoid them.

1. Late Registration: AED 10,000

A business that does not register for Corporate Tax within the FTA's deadline faces a fixed penalty of AED 10,000. New companies generally have three months from incorporation to register. Individuals whose business turnover exceeds AED 1 million in a calendar year must register by 31 March of the following year.

In May 2025, the FTA announced that this penalty would be waived, or refunded if already paid, for businesses that file their first Corporate Tax return or annual declaration within seven months of the end of their first tax period. The FTA did not announce an end date, so check with the FTA whether the waiver applies to your case.

See our Corporate Tax registration guide for the deadlines and steps.

2. Late Tax Return: AED 500 to AED 1,000 per Month

If a Corporate Tax return is not filed on time, the penalty is:

  • AED 500 for each month, or part of a month, for the first 12 months.
  • AED 1,000 for each month, or part of a month, from the 13th month onwards.

The same amounts apply to a late annual declaration. Returns are due within nine months of the end of the tax period, so for a 31 December year end the deadline is 30 September of the following year.

3. Late Payment: 14% per Year

Corporate Tax that is not paid by the due date attracts a penalty at a rate of 14% per year, charged for each month or part of a month that the tax remains unpaid. It starts the day after the payment deadline.

For tax arising from a voluntary disclosure or a tax assessment, the payment due date is 20 business days from submission or receipt.

4. Record-Keeping: AED 10,000 to AED 20,000

Failing to keep the records and information required by the tax laws carries a penalty of AED 10,000 for each violation, rising to AED 20,000 if the violation is repeated within 24 months. Corporate Tax records should generally be kept for seven years after the end of the tax period.

5. Errors in a Tax Return

  • Incorrect tax return: AED 500, unless the business corrects the return before the filing deadline.
  • Voluntary disclosure of an error: a monthly 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 made.
  • No voluntary disclosure before a tax audit is notified: a fixed 15% of the tax difference, plus a monthly 1% of the tax difference.

The difference between these figures shows why it pays to correct errors yourself, as early as possible, before the FTA finds them.

6. Other Penalties

  • Late deregistration: AED 1,000, plus AED 1,000 each month, up to a maximum of AED 10,000.
  • Not notifying the FTA of changes to your tax record: AED 1,000, or AED 5,000 if repeated within 24 months.
  • Not submitting documents in Arabic when requested: AED 5,000.
  • Not cooperating with a tax auditor: AED 20,000.

How to Avoid Corporate Tax Penalties

  1. Register on time. Note your registration deadline the day your trade licence is issued.
  2. Keep a tax calendar. Record your return and payment deadline, nine months after your year end.
  3. Keep your books up to date. Reliable records make returns faster and protect you in an audit.
  4. Review before filing. Check the figures and any reliefs claimed before you submit.
  5. Correct errors quickly. If you find a mistake, file a voluntary disclosure before the FTA notifies you of an audit.
  6. Update your tax record. Tell the FTA about changes such as a new address, owners or licence details.

Read our guides on Corporate Tax return filing and Small Business Relief for more detail.

Frequently Asked Questions

What is the penalty for late Corporate Tax registration in the UAE?

AED 10,000. The FTA has announced a waiver for businesses that file their first return within seven months of the end of their first tax period.

What is the penalty for filing a Corporate Tax return late?

AED 500 for each month or part of a month for the first 12 months, then AED 1,000 per month from the 13th month.

What is the penalty for paying Corporate Tax late?

A penalty at a rate of 14% per year, charged for each month or part of a month that the tax is unpaid.

Can Corporate Tax penalties be waived?

The FTA offers a request process for instalments, waivers and refunds of administrative penalties in certain cases. Whether a waiver is granted depends on the circumstances, so speak to a tax adviser before applying.

Note: This article provides general information only and is not tax advice. Penalty amounts and waiver initiatives can change. Confirm the current rules with the Federal Tax Authority or a qualified tax professional.