VAT
VAT Penalty Calculator UAE
Compute UAE VAT penalties from Cabinet Decision No. 40 of 2017 as amended in 2026, and see why no honest tool prints a monthly late-payment rate.
vat penalty calculator uae
A UAE VAT penalty has two parts. Fixed amounts under Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025: AED 1,000 for a first late return, AED 500 for an incorrect one, 1% of the tax difference per month on a voluntary disclosure. Then a late-payment charge of 14% per annum on unsettled payable tax, in force since 14 April 2026.
Basis: Federal Tax Authority, as published by the Ministry of Finance
- Late payment of VAT
- 14% per annum, for each month or part thereof, on the unsettled payable tax
- Date the current schedule took effect
- 14 April 2026
- Late VAT return
- AED 1,000 the first time, AED 2,000 for a repeat within 24 months
- Incorrect VAT return
- AED 500
- Voluntary disclosure
- 1% of the tax difference for each month or part thereof
- Error the FTA finds first
- A fixed 15% of the tax difference, plus 1% per month or part thereof
- Late VAT registration
- AED 10,000
- Filing and payment deadline the clock runs from
- The 28th day following the end of the tax period
- Ceiling on an administrative penalties assessment
- Two times the tax the assessment was issued in respect of
Table 1, item 9, Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025
Cabinet Decision No. 129 of 2025, issued 9 October 2025, per the effective-date table on the consolidated text
Table 1, item 8, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 10, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 11, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 12, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 3, Cabinet Decision No. 40 of 2017 as amended
Article 64(1) and 64(3), Cabinet Decision No. 52 of 2017 (VAT Executive Regulation)
Article 24(4), Federal Decree-Law No. 28 of 2022 on Tax Procedures, as amended by Federal Decree-Law No. 17 of 2024
#Work out the amounts the schedule actually fixes
Filing and paying are two separate obligations that share one deadline. Article 64(1) of the VAT Executive Regulation requires the return to reach the Federal Tax Authority no later than the 28th day following the end of the tax period, and Article 64(3) requires the payable tax to be received by the same date. A return filed on the 28th and paid on the 30th attracts no late-filing penalty and a full late-payment charge. The reverse is also true, which is why filing on time with a payment problem is almost always better than filing nothing.
The calculator below computes the penalties that Cabinet Decision No. 40 of 2017 states as a fixed dirham amount or as a stated percentage of the tax difference. It stops short of the late-payment charge, and the section after it explains why in detail. Every row shows the item of the schedule it comes from, so you can check the arithmetic against the primary text rather than trusting the output.
Estimate
UAE VAT administrative penalties
Computed from Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025, in force since 14 April 2026. The late-payment charge is shown as the annual rate the decision states, not as a monthly figure — see below.
Your figures
The VAT that was due and not settled by the 28th day after the tax period ended. Enter the tax only, never a previous penalty: a penalty and the tax are two separate debts under Article 3 of the Decision and Article 24(5) of the Tax Procedures Law.
Table 1, item 8 charges AED 1,000 the first time and AED 2,000 for a repeat within 24 months of the last violation.
Table 1, item 3 charges a one-off AED 10,000 for failing to apply within the timeframe set by the VAT Law. Article 7(2) of the VAT Executive Regulation gives 30 days from becoming liable.
This is the single most expensive choice on the page. Disclosing first costs 1% a month; being found first adds a fixed 15% of the whole difference.
Article 1 of the Decision defines Tax Difference as the difference between the due tax as calculated and the due tax as it should have been calculated. Leave it at zero if the return was correct.
Counted from the day following the due date of the return until the voluntary disclosure is submitted, or until the assessment is issued where no disclosure was made. A part month counts as a month.
JavaScript is switched off, so the figures on the right are worked at the default values shown above rather than at yours. The rule, the bands and the worked example below are complete either way — you can do this on paper in under a minute.
The workings
Total of the amounts the schedule fixes: AED 2,700.00
| Late filing of the VAT return Table 1, item 8. A flat amount per return, not a monthly charge — the monthly escalation people expect here belongs to corporate tax, where Cabinet Decision No. 75 of 2023 charges AED 500 a month rising to AED 1,000 from the thirteenth month. | AED 1,000.00 |
|---|---|
| Late VAT registration Table 1, item 3. One-off, and it does not repeat monthly. It is not the same penalty as the AED 10,000 for late corporate tax registration, which sits in a different decision and has its own separate waiver route. | AED 0.00 |
| Incorrect return Table 1, item 10 charges AED 500 for an incorrect return, and lists only two escapes: correcting it within the deadline for submitting the return, or a voluntary disclosure that produces no difference in due tax. Where the disclosure does change the tax, the 500 stands on top of the percentage penalties. | AED 500.00 |
| Monthly penalty on the tax difference, at 1% Table 1, items 11 and 12(2). Unlike the late-payment rate, this one is stated as a monthly percentage in the text, so it can be modelled exactly. It runs from the day following the due date of the return to the date of the disclosure, or to the date of the assessment where nothing was disclosed. | AED 1,200.00 |
| Fixed 15% for not disclosing before the audit notice Table 1, item 12(1). A one-off 15% of the whole tax difference, charged in addition to the 1% a month, and the reason self-correction is so much cheaper than being audited. | AED 0.00 |
| Total of the amounts the schedule fixes This total deliberately excludes the late-payment charge. It is what Cabinet Decision No. 40 of 2017 states in fixed amounts and stated percentages, and nothing more. | AED 2,700.00 |
| Late payment: 14% per annum, for one full year unsettled The decision states the rate annually. This row is therefore the charge for a full year with the tax unsettled — it is not apportioned to the months you entered, because the decision does not say how a single month or part month is apportioned and the FTA has published no worked calculation. | AED 7,000.00 |
| Article 24(4) ceiling: two times the tax Article 24(4) of the Tax Procedures Law says the amount of any administrative penalty shall not exceed two times the amount of tax the administrative penalties assessment was issued in respect of. Shown for reference only: this tool does not silently cap anything, because whether the ceiling applies penalty by penalty or to an assessment as a whole is not resolved in the text. | AED 100,000.00 |
An estimate produced from published rates, not tax advice and not a return. Confirm every figure against the Federal Tax Authority before you file, pay or price anything on it.
The rule, in words
- Late filing of a VAT return: AED 1,000 the first time, AED 2,000 for a repeat within 24 months — Table 1, item 8.
- Late registration: AED 10,000, one off — Table 1, item 3.
- Incorrect return: AED 500, unless corrected within the filing deadline or disclosed with no change to due tax — Table 1, item 10.
- Voluntary disclosure: 1% of the tax difference for each month or part thereof, from the day after the return was due to the date of the disclosure — Table 1, item 11.
- No disclosure before the audit notice: a fixed 15% of the tax difference plus the same 1% a month — Table 1, item 12.
- Late payment: a monthly penalty of 14% per annum, for each month or part thereof, on the unsettled payable tax from the day following the due date and on the same date monthly thereafter — Table 1, item 9.
- For a voluntary disclosure the payment due date is 20 business days from submission; for a tax assessment it is 20 business days from receipt — Table 1, item 9(2).
- This tool does not convert 14% per annum into a monthly amount. The decision publishes no apportionment for a single month or part month, and no primary source confirms one.
- No administrative penalty may exceed two times the tax the assessment was issued in respect of — Article 24(4) of the Tax Procedures Law.
- A penalty never discharges the tax. Article 3 of the Decision and Article 24(5) of the Tax Procedures Law both say so, from opposite directions.
| Violation | Penalty in AED | Where it is set |
|---|---|---|
| Failure to keep the required records and information | 10,000; 20,000 for a repeat within 24 months | Table 1, item 1 |
| Failure to submit records in Arabic when requested | 5,000 | Table 1, item 2 |
| Failure to apply for VAT registration in time | 10,000 | Table 1, item 3 |
| Failure to apply for deregistration in time | 1,000 on late submission and monthly on the same date, up to 10,000 | Table 1, item 4 |
| Failure to notify a change to the tax record | 1,000; 5,000 for a repeat within 24 months | Table 1, item 5 |
| Failure to file the VAT return in time | 1,000 first time; 2,000 for a repeat within 24 months | Table 1, item 8 |
| Failure to settle the payable tax in time | 14% per annum, for each month or part thereof, on the unsettled amount | Table 1, item 9 |
| Submitting an incorrect return | 500 | Table 1, item 10 |
| Submitting a voluntary disclosure | 1% of the tax difference per month or part thereof | Table 1, item 11 |
| Failing to disclose before the audit notice | 15% of the tax difference, plus 1% per month or part thereof | Table 1, item 12 |
| Failure to offer facilitation to the tax auditor | 20,000, from the person's own funds | Table 1, item 13 |
| Failure to account for tax on behalf of another person | 14% per annum, for each month or part thereof | Table 1, item 14 |
| Failure to calculate tax due on an import of goods | 50% of the unpaid or undeclared tax | Table 1, item 15 |
| Failure to display prices inclusive of VAT | 5,000 | Table 3, item 1 |
| Failure to notify the FTA of applying tax on the margin | 2,500 | Table 3, item 2 |
| Designated zone conditions for keeping or moving goods | The higher of 50,000 or 50% of the tax chargeable on the goods | Table 3, item 3 |
| Failure to issue a tax invoice or alternative document in time | 2,500 for each detected case | Table 3, item 4 |
| Failure to issue a tax credit note or alternative in time | 2,500 for each detected case | Table 3, item 5 |
| Failure to meet the conditions for issuing invoices and credit notes electronically | 2,500 for each detected case | Table 3, item 6 |
Worked example: AED 50,000 of VAT unsettled, return filed late for the first time, and an AED 20,000 understatement disclosed six months after the due date
- Late filing, first time
- AED 1,000 — Table 1, item 8
- Late registration
- Nil — the registration application was on time
- Incorrect return
- AED 500 — Table 1, item 10, not excused because the disclosure changed the due tax
- Voluntary disclosure at 1% a month
- 20,000 × 1% × 6 = AED 1,200 — Table 1, item 11
- Fixed 15%
- Nil — the disclosure came before any audit notice
- Total the schedule fixes
- 1,000 + 500 + 1,200 = AED 2,700
- Late payment at 14% per annum
- 50,000 × 14% = AED 7,000 for a full year unsettled, not divided into six months
- Article 24(4) ceiling
- 2 × 50,000 = AED 100,000
What this does not model
- The late-payment amount itself. The rate is 14% per annum; the apportionment for a single month or part month is not published, so no figure is produced.
- Corporate tax penalties, which come from Cabinet Decision No. 75 of 2023 and use different amounts and a different monthly-anniversary rule.
- Excise tax penalties in Table 2, and the electronic invoicing penalties in Cabinet Decision No. 106 of 2025.
- Per-document penalties in Table 3 — AED 2,500 for each detected case — because the number of cases the FTA detects is not knowable in advance.
- The late deregistration penalty, which repeats monthly to a maximum of AED 10,000 and needs a date of occurrence rather than a tax amount.
- Any waiver or instalment outcome under Article 50 of the Tax Procedures Law and Cabinet Decision No. 105 of 2021. A waiver is a decision of a committee, not an arithmetic result.
- Tax evasion, which is criminal under Article 25 of the Tax Procedures Law and is not an administrative penalty at all.
Where the rule comes from
- Cabinet Decision No. 40 of 2017 on Administrative Penalties and its amendments, consolidated to Cabinet Decision No. 129 of 2025 (effective 14 April 2026)
- Federal Decree-Law No. 28 of 2022 on Tax Procedures, consolidated to Federal Decree-Law No. 17 of 2025 — Articles 10, 24 and 46
- Cabinet Decision No. 52 of 2017, the VAT Executive Regulation — Article 64 on the return and payment deadline
This is an estimate, not advice. It applies the rates and thresholds published in the instruments listed above to the figures you enter, and nothing else. It does not know your reliefs, exemptions, group position or accounting policy, it is not a tax return, and it creates no professional relationship. Rates and thresholds change: confirm yours with the Federal Tax Authority or a registered tax agent before you rely on any figure here.
#Why no monthly late-payment figure appears above
Item 9 of Table 1 imposes "a monthly penalty of (14%) per annum, for each month or part thereof, imposed on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter." Read from the consolidated text published by the Ministry of Finance and checked on 17 August 2026.
That sentence fixes the rate and the charging dates. It does not fix the apportionment. At least three readings are open on the face of it: the annual rate divided into twelfths, so each charging event costs one twelfth of 14%; a daily accrual within each month; or a part month treated as a whole month for the entire monthly charge. The FTA has published no worked calculation choosing between them, and the decision itself contains no example.
Dividing 14 by 12 produces a tidy monthly percentage that appears on a great many advisory pages. It is a guess. It may well turn out to be right, but nothing published by the Authority or the Cabinet confirms it, and a calculator that prints it is presenting an inference as a statutory figure. So this page does not state a monthly rate, and the tool above does not multiply one out. What it shows instead is the figure the decision does state: 14% of the unsettled tax for a full year unsettled.
The practical answer is unglamorous and correct. The assessed amount appears on your EmaraTax ledger, calculated by the FTA's own system, and that ledger is the only authoritative figure. If the number there differs from an estimate you were given, the ledger governs and the route to argue with it is a reconsideration, not a recalculation in a spreadsheet.
#What 14% replaced on 14 April 2026
Anyone arriving here from another calculator will have seen a different formula, and it is worth being precise about what happened rather than just asserting that the other page is wrong.
Cabinet Decision No. 129 of 2025 was issued on 9 October 2025 and took effect on 14 April 2026. The effective-date table printed at the top of the consolidated text lists all four instruments in the chain: the original decision of 24 September 2017, Cabinet Decision No. 49 of 2021 from 28 June 2021, Cabinet Decision No. 108 of 2021 from 1 January 2022, and Cabinet Decision No. 129 of 2025 from 14 April 2026. Tables 1 and 3 carry a footnote confirming they were amended by the 2025 decision; Table 2, the excise table, still carries a footnote pointing to the 2021 amendment.
Under the schedule that Cabinet Decision No. 49 of 2021 put in place, late payment cost 2% of the unpaid tax on the day following the due date, then 4% monthly from one month after the due date, capped at 300% of the unpaid tax. Those three numbers were correct law until 13 April 2026. They are not in the current text at all — no 2%, no 4%, and no percentage cap. What replaced them is the single 14% per annum charge, which is the rate corporate tax has used since Cabinet Decision No. 75 of 2023 came into force on 1 August 2023. April 2026 aligned VAT with corporate tax; it did not invent a new rate.
#The monthly anniversary rule, and the schedule that does the opposite
Several penalties repeat "on the same date monthly", which raises an obvious problem in a month that has no such date. Both schedules answer it, and they answer it differently — so importing the rule from the wrong one moves a charging date by up to two days.
For VAT and excise, the footnote to Table 1 records the rule introduced by Cabinet Decision No. 49 of 2021: where a penalty is to be imposed on the same date monthly, the date for a month that does not contain a corresponding date is the first day of the following month, and the penalty for all other months falls on the date the monthly penalty was first imposed.
For corporate tax, Article 3 of Cabinet Decision No. 75 of 2023 uses the opposite convention: a month with no corresponding date rolls back to the last day of that month.
So a monthly charge first imposed on 31 March falls on 1 May under the VAT schedule and on 30 April under the corporate tax schedule, and both then return to the 31st in months that have one. The difference is small in money and large in principle: it decides whether a payment made on 30 April was made before or after a charging event, and it is the sort of detail a tool that quietly reuses one convention for both taxes will get wrong for one of them.
#Where the 1% monthly charge stops growing
The 1% monthly penalty on a tax difference has no express cap in the schedule. Left alone it would reach 100% of the difference after 100 months. Two outer limits cut it off long before that, and both are in the Tax Procedures Law rather than in the penalty decision.
Article 46 sets the general five-year limitation: the FTA may not conduct a tax audit or issue a tax assessment more than five years after the end of the relevant tax period, extended to fifteen years for tax evasion or a failure to register at all. Article 46(6) separately bars a voluntary disclosure more than five years after the end of the relevant tax period, with a narrow exception for a disclosure about a refund application the Authority has not yet decided. Note the clause number: Federal Decree-Law No. 17 of 2025 inserted a new clause into Article 46, so the bar widely cited as Article 46(5) is now Article 46(6).
Within an ordinary five-year window, 60 monthly charges at 1% therefore come to 60% of the tax difference — arithmetic on the stated rate, not a published figure. Above that sits the Article 24(4) ceiling of two times the tax. The calculator shows that ceiling but does not apply it, because the text does not settle whether it operates on each penalty separately or on the assessment as a whole, and a tool that silently caps a total would be answering a question the law has not answered.
#What this tool will not tell you
A penalty estimate that models things it cannot know produces a confident wrong number, and on a tax debt that is worse than no number.
- A monthly late-payment amount. The rate is annual and the apportionment is unpublished. Stated once above, and worth stating twice.
- Your actual exposure. The FTA assesses penalties on the EmaraTax ledger. That ledger, not this page, is authoritative, and it reflects things a form cannot see: which violations were recorded, on what dates, and against which tax periods.
- Whether a penalty will be waived. Article 50 of the Tax Procedures Law and Cabinet Decision No. 105 of 2021 put waiver, instalment and refund decisions with a committee, on nine listed grounds. It is not arithmetic and it is not the same provision as Article 46, which is the statute of limitation and is routinely cited for waiver by mistake.
- Corporate tax, excise or e-invoicing penalties. Three different decisions, three different tables. Corporate tax in particular charges late filing monthly rather than as a flat amount, so reusing this page's figures there would understate a long-overdue return badly.
- A discount for early settlement. No provision in the current schedule reduces a penalty for paying it quickly. The redetermination relief that once cut pre-2021 penalties to 30% closed on 31 December 2021, and Cabinet Decision No. 108 of 2021 could not be opened from an official source, so its terms are not restated here.
One oddity in the primary text is worth flagging, because it looks like a mistake in a page that quotes it and is not. Article 5 of Cabinet Decision No. 40 of 2017 still directs objections to the procedures in Federal Law No. 7 of 2017 on Tax Procedures — a law repealed by Article 55 of Federal Decree-Law No. 28 of 2022. The live objection route is in the current Decree-Law: a reconsideration, then the Tax Disputes Resolution Committee, then the court. The stale cross-reference is in the consolidated text as published, checked 17 August 2026.
Sources and legal basis
This page relies on
- Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws
- Cabinet Decision No. 129 of 2025 (VAT penalties rewrite, effective 14 April 2026)
- Cabinet Decision No. 49 of 2021 (the superseded 2%, 4% and 300% formula)
- Cabinet Decision No. 108 of 2021
- Table 1 of Cabinet Decision No. 40 of 2017 (Tax Procedures violations)
- Table 3 of Cabinet Decision No. 40 of 2017 (VAT violations)
- Federal Decree-Law No. 28 of 2022 on Tax Procedures
- Federal Decree-Law No. 17 of 2025 (amendment to the Tax Procedures Law, in force 1 January 2026)
- Article 10 of the Tax Procedures Law (Voluntary Disclosure)
- Article 24(4) of the Tax Procedures Law (two-times ceiling on an administrative penalty)
- Article 24(5) of the Tax Procedures Law (a penalty does not discharge the tax)
- Article 46 of the Tax Procedures Law (Statute of Limitation)
- Article 50 of the Tax Procedures Law (Waiving or Refunding Administrative Penalties)
- Article 55 of the Tax Procedures Law (repeal of Federal Law No. 7 of 2017)
- Federal Decree-Law No. 8 of 2017 on Value Added Tax
- Federal Decree-Law No. 16 of 2025 (VAT Law amendments, in force 1 January 2026)
- Cabinet Decision No. 52 of 2017 (VAT Executive Regulation)
- Article 64 of the VAT Executive Regulation (return and payment deadline)
- Cabinet Decision No. 75 of 2023 on Administrative Penalties for Corporate Tax
- Cabinet Decision No. 74 of 2023 (Executive Regulation of the Tax Procedures Law)
- Cabinet Decision No. 105 of 2021 on Instalments, Waiver and Refund of Administrative Penalties
- Cabinet Decision No. 106 of 2025 on Electronic Invoicing Violations and Administrative Penalties
- Federal Law No. 7 of 2017 on Tax Procedures (repealed)
- Tax Difference
- Payable Tax
- Voluntary disclosure
- Administrative penalties assessment
- Tax Disputes Resolution Committee
- Federal Tax Authority (FTA)
- Ministry of Finance (MoF)
- EmaraTax
- Cabinet Decision No. 40 of 2017 on Administrative Penalties and its amendments, consolidated to Cabinet Decision No. 129 of 2025 effective 14 April 2026Federal Tax Authority, as published by the Ministry of Finance
- Federal Decree-Law No. 28 of 2022 on Tax Procedures and its amendments, consolidated to Federal Decree-Law No. 17 of 2025Federal Tax Authority, as published by the Ministry of Finance
- Executive Regulation of the VAT Law, Cabinet Decision No. 52 of 2017 and its amendments — Article 64 on the return and payment deadlineFederal Tax Authority
- Cabinet Decision No. 49 of 2021, the superseded schedule with the 2%, 4% and 300% late-payment formulaFederal Tax Authority
- Cabinet Decision No. 75 of 2023 and its amendments on corporate tax administrative penalties, for the differing monthly-anniversary rule in Article 3UAE Ministry of Finance
- FTA legislation library, where the effective-date block of each consolidated instrument can be checkedFederal Tax Authority
- Requests for instalment, waiver and refund of administrative penaltiesFederal Tax Authority
Rates, thresholds and deadlines change. Every figure above is linked to the authority that publishes it — if the two ever disagree, the authority is right and this page is out of date. Tell us and we will fix it.
Frequently asked questions
Is there a UAE VAT penalty calculator?
The tool on this page computes the penalties Cabinet Decision No. 40 of 2017 states as fixed amounts or as percentages of a tax difference: late filing, late registration, an incorrect return, a voluntary disclosure at 1% a month, and the fixed 15% where the Authority finds the error first. It stops short of the late-payment charge, because the decision states that rate annually and publishes no monthly apportionment.
Why does this VAT penalty calculator show no late payment figure?
Because the amount for a single month cannot be derived from the text. Item 9 of Table 1 imposes 14% per annum for each month or part thereof, and neither the Cabinet nor the Federal Tax Authority has published how that annual rate is apportioned to one month. Dividing 14 by 12 is an inference, not a statutory figure. The assessed amount on your EmaraTax ledger is the authoritative one.
Does the 300% VAT penalty cap still apply in the UAE?
No. The 2% immediate charge, the 4% monthly charge and the 300% ceiling came from Cabinet Decision No. 49 of 2021 and were replaced on 14 April 2026 by Cabinet Decision No. 129 of 2025. The current text has no percentage cap on the late-payment charge. A separate limit does apply: Article 24(4) of the Tax Procedures Law caps any administrative penalty at two times the tax assessed.
Which decision sets UAE VAT penalties in 2026?
Cabinet Decision No. 40 of 2017, as amended by Cabinet Decisions No. 49 of 2021, No. 108 of 2021 and No. 129 of 2025, with the current schedule in force since 14 April 2026. Table 1 covers Tax Procedures violations and applies to VAT and excise alike; Table 3 holds the VAT-only penalties. Corporate tax sits in Cabinet Decision No. 75 of 2023 instead.
What is the penalty for filing a UAE VAT return late?
AED 1,000 for the first late return and AED 2,000 for a repeat within 24 months of the last violation, under item 8 of Table 1. It is a flat amount per return, not a monthly charge. Paying late is a separate penalty that runs at 14% per annum on the unsettled tax, so a return filed on time but paid late still attracts the payment charge.