VAT
VAT Penalties in the UAE
The complete UAE VAT penalty schedule in force since 14 April 2026, what triggers each item, and why the old 2% plus 4% formula no longer exists.
vat penalty uae
UAE VAT penalties are set by Cabinet Decision No. 40 of 2017, rewritten by Cabinet Decision No. 129 of 2025 with effect from 14 April 2026. Late registration costs AED 10,000, a late return AED 1,000 and then AED 2,000, an incorrect return AED 500, and unsettled tax carries a monthly penalty of 14% per annum on the amount outstanding.
Basis: Federal Tax Authority, as published by the Ministry of Finance
- Late VAT registration
- AED 10,000
- Late VAT deregistration
- AED 1,000 on late submission and on the same date monthly, up to a maximum of AED 10,000
- Late VAT return
- AED 1,000 the first time, AED 2,000 for a repeat within 24 months
- Late payment of VAT
- 14% per annum, for each month or part thereof, on the unsettled payable tax
- Incorrect VAT return
- AED 500, with only two escapes in the text
- Date the current schedule took effect
- 14 April 2026
- Deadline the filing and payment penalties both run 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 3, Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025
Table 1, item 4, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 8, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 9, Cabinet Decision No. 40 of 2017 as amended
Table 1, item 10, Cabinet Decision No. 40 of 2017 as amended
Cabinet Decision No. 129 of 2025, issued 9 October 2025, per the effective-date block printed on the consolidated text
Article 64(1) and Article 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
#Which table your violation sits in, and what triggers each item
There is no single list of UAE VAT penalties. Cabinet Decision No. 40 of 2017 carries three tables, and which one you are in decides the amount. Table 1 covers violations of the Tax Procedures Law and therefore applies to VAT and excise alike: registration, deregistration, returns, payment, records and voluntary disclosure all sit there. Table 2 is excise-only. Table 3 is VAT-only, and it holds the invoicing, margin-scheme and price-display penalties. Tables 1 and 3 were rewritten by Cabinet Decision No. 129 of 2025 with effect from 14 April 2026; Table 2 still carries a footnote pointing to the 2021 amendment. Read from the consolidated text published by the Ministry of Finance, checked 17 August 2026.
The amounts are only half the answer. What decides whether you pay is the trigger — the act or omission that starts the charge — because almost every item here is avoidable up to a date and unavoidable after it. The middle column below states each trigger from the primary text rather than restating the violation title back at you.
| Item | What triggers it | Penalty in AED |
|---|---|---|
| 1 · Required records not kept | Not holding the records and information the Tax Procedures Law and the VAT Law require, for the period they must be kept. The trigger is absence, not untidiness | 10,000 for each violation; 20,000 for a repeat within 24 months of the last violation |
| 2 · Records not given in Arabic | An FTA request for tax data, records and documents in Arabic that is not met. Keeping the books in English is not itself the violation; refusing or failing the request is | 5,000 |
| 3 · Registration application late | Missing the timeframe in the VAT Law, which Article 7(2) of the Executive Regulation sets at 30 days from becoming required to register. Article 7(3) then lets the FTA register you from the date you first became liable anyway | 10,000 |
| 4 · Deregistration application late | Missing the 20 business days from the triggering event that Article 14(1) of the Executive Regulation allows | 1,000 on late submission of the application and on the same date monthly, up to a maximum of 10,000 |
| 5 · Change to the tax record not notified | Missing the 20 business days that Article 6(2)(b) of the Tax Procedures Law allows for informing the FTA of an event requiring amendment of the tax record — a changed registered email, mobile number or authorised signatory among them | 1,000 for each violation; 5,000 for a repeat within 24 months |
| 6 · Legal representative's appointment not notified | The legal representative's own failure to give notification of the appointment within the specified timeframe | 1,000, due from the legal representative's own funds |
| 7 · Legal representative files the return late | The same failure as item 8, but where a legal representative is the person obliged to file | 1,000 for the first time; 2,000 for a repeat within 24 months, from the representative's own funds |
| 8 · Registrant files the return late | The return not received by the FTA by the 28th day following the end of the tax period, under Article 64(1) of the Executive Regulation | 1,000 for the first time; 2,000 for a repeat within 24 months |
| 9 · Payable tax not settled in time | The tax not received by that same 28th day, under Article 64(3). For a voluntary disclosure the due date is 20 business days from submission; for a tax assessment, 20 business days from receipt | 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 |
| 10 · Incorrect return submitted | Submitting a return that is wrong. The text allows exactly two escapes: correcting it within the deadline for submitting that return, or a voluntary disclosure that produces no difference in the due tax | 500 |
| 11 · Voluntary disclosure submitted | The disclosure itself. The clock runs from the day after the return was due, or the refund application was submitted, until the disclosure is filed | 1% of the tax difference for each month or part thereof |
| 12 · No disclosure before the audit notice | Not having disclosed the error before the FTA notified you that you would be subject to a tax audit. The 1% then runs to the disclosure date, or to the date the assessment is issued if you never disclose at all | A fixed 15% of the tax difference, plus 1% of it for each month or part thereof |
| 13 · Tax auditor not facilitated | Breach of Article 20 of the Tax Procedures Law by the person under audit, their tax agent or their legal representative | 20,000, due from that person's own funds |
| 14 · Tax not accounted for on behalf of another person | A registrant failing to calculate tax for someone else where the VAT Law obliges it to — the reverse-charge cases | 14% per annum, for each month or part thereof, on the unsettled payable tax, with the same 20-business-day due dates as item 9 |
| 15 · Import tax not calculated | Failing to calculate any tax that may be due on an import of goods under the VAT Law | 50% of the unpaid or undeclared tax |
The VAT-only penalties in Table 3
Failure to display prices inclusive of tax costs AED 5,000. Failure to notify the FTA of applying tax on the margin costs AED 2,500. Failure to meet the conditions for keeping goods in a designated zone, or moving them to another designated zone, costs the higher of AED 50,000 or 50% of the tax chargeable on the goods concerned. Three invoicing failures — not issuing a tax invoice or its alternative in time, not issuing a tax credit note or its alternative in time, and not meeting the conditions for issuing invoices and credit notes electronically — each cost AED 2,500 for each detected case. That phrase is the important one. These scale with the number of documents the FTA finds, not with the tax at stake, so a business with high invoice volume and no underpaid tax can still accumulate a large number.
#Filing late and paying late are two separate charges
One deadline, two obligations, two penalties. 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 that same date. Miss the first and item 8 charges a flat AED 1,000, or AED 2,000 if you did the same thing within the previous 24 months. Miss the second and item 9 charges 14% per annum on whatever remains unsettled, for each month or part thereof, starting the day after the due date and recurring on the same date monthly.
The consequence is worth being blunt about. A return filed on the 28th and paid on the 30th attracts no filing penalty and the full payment charge. A return not filed at all, but with the money sent, attracts the filing penalty and — because the FTA has no return to apply the payment against for that period — leaves you arguing about what was settled and when. Filing on time with a payment problem is almost always the cheaper failure.
One thing this page will not do is convert 14% per annum into a monthly percentage. The decision fixes the rate and the charging dates; it does not fix the apportionment, and no worked calculation has been published by the Cabinet or the FTA choosing between dividing the annual rate into twelfths, accruing it daily, or treating a part month as a whole month for the entire charge. Dividing 14 by 12 is arithmetic, not law. The assessed amount on your EmaraTax ledger is the authoritative figure.
#Deregistration: the penalty that keeps growing while nobody is looking
This is the item people search for after the fact, and it is the only VAT penalty in Table 1 that compounds monthly on a fixed amount rather than on a tax figure. Item 4 charges AED 1,000 on late submission of the deregistration application and the same amount on the same date monthly, up to a maximum of AED 10,000. Ten months of inattention is the whole ceiling.
The trigger sits in two places. Article 21 of the VAT Law makes deregistration compulsory where the registrant stops making taxable supplies, and where taxable supplies over twelve consecutive months fall below the voluntary registration threshold of AED 187,500 with no expectation of exceeding it. Article 14(1) of the Executive Regulation then gives 20 business days from the occurrence of either event to apply. The penalty does not begin when the business stops trading; it begins 20 business days later, which is why dormant companies accrue it silently.
Two further provisions make it worse than it looks. Article 14(7) of the Executive Regulation requires a registrant applying to deregister to pay all tax and administrative penalties due and to file the final tax return — so the penalty blocks the exit it was imposed for missing. And Article 14 bis, added by Cabinet Decision No. 100 of 2024, lets the FTA deregister a person on its own initiative to protect the integrity of the tax system; clause 3 states that deregistration initiated by the Authority does not absolve the person from complying with the law, including registering again when the conditions are met.
#What 14% per annum replaced on 14 April 2026
If you arrived here from another page quoting 2%, 4% or a 300% cap, that page is describing law that expired on 13 April 2026. It is worth being precise about what happened rather than simply asserting the other page is wrong, because searches for the 2021 and 2022 versions of this schedule are still common and the old figures were correct for nearly five years.
Under Cabinet Decision No. 49 of 2021, a late payer owed 2% of the unpaid tax on the day following the due date, then a 4% monthly penalty from one month after the due date and on the same date monthly thereafter, all capped at a maximum of 300% of the unpaid tax. Read at source in the 2021 decision. Cabinet Decision No. 129 of 2025 removed all three numbers. The current text contains no 2%, no 4% and no percentage cap on the late-payment charge at all — only the single 14% per annum figure.
That rate was not invented in 2026. Corporate tax has expressed its late-payment penalty as 14% per annum since Cabinet Decision No. 75 of 2023 came into force on 1 August 2023, so what the April 2026 amendment did was bring VAT and excise into line with corporate tax. One consequence is that the two regimes now share a rate while still differing on the monthly anniversary rule described above.
| Instrument | Effective from | Its late-payment rule |
|---|---|---|
| Cabinet Decision No. 40 of 2017 | 24 September 2017; Table 2 from 1 October 2017 and Table 3 from 1 January 2018 under Article 7 | The original schedule. Its wording is not restated here: the consolidated text shows only the current version of each amended table |
| Cabinet Decision No. 49 of 2021 | 28 June 2021 | 2% of the unpaid tax on the day after the due date, then 4% monthly from one month after the due date, to a maximum of 300% |
| Cabinet Decision No. 108 of 2021 | 1 January 2022 | Amended the decision again. This text could not be opened from an official source, so its terms are not restated here |
| Cabinet Decision No. 129 of 2025 | 14 April 2026 | A monthly penalty of 14% per annum, for each month or part thereof, on the unsettled payable tax. No percentage cap appears in the replacement text |
#Removing, reducing or waiving a UAE VAT penalty
Four routes exist, and they are not equally useful. Ranked by what they can actually achieve, the cheapest is always the one taken before a penalty is imposed at all, and the most commonly searched — a waiver — is the narrowest.
Nothing here is an entitlement. The waiver is a decision of a committee on defined grounds, the disclosure route only helps before an audit notice, and the dispute route requires money on the table before it will be heard. This page publishes no success rates and no fee, because this firm has none published.
Correct it before it becomes a penalty
Item 10 lists exactly two escapes from the AED 500 incorrect-return penalty: correcting the return within the deadline for submitting it, or a voluntary disclosure that produces no difference in the due tax. Separately, where an error understates payable tax by AED 10,000 or less, Article 10 of Cabinet Decision No. 74 of 2023 lets you correct it in the next return that has not yet fallen due rather than filing a disclosure at all.
Disclose before the FTA notifies an audit
This is the single largest reduction available and it is entirely in your hands. Disclose and item 11 charges 1% of the tax difference per month. Wait until the Authority notifies you that you will be audited and item 12 adds a fixed 15% of the whole difference on top of that same 1% a month. Where the difference exceeds AED 10,000 the disclosure is due within 20 business days of becoming aware of the error, counted from the date of awareness.
Apply for a waiver, instalments or a refund under Article 50
Article 50 of Federal Decree-Law No. 28 of 2022 — not Article 46, which is the statute of limitation and is routinely cited for this by mistake — lets a committee formed by the FTA board waive a penalty in whole or part, allow payment by instalments, or refund one already paid. The controls are in Cabinet Decision No. 105 of 2021: the violation must not be connected to tax evasion and the facts must fall into one of nine listed grounds, which cover death, illness, the loss of a key employee, government-imposed restrictions, a general failure of FTA systems or payment gateways, a custodial sentence, tax paid through another registrant's account, insolvency, and a residual category at the committee's discretion. The FTA lists the request as free of charge with a response within 110 business days.
Dispute the decision itself
Where the penalty should not have been imposed rather than merely being unaffordable, the route is a reconsideration to the FTA within 40 business days of notification, then an objection to the Tax Disputes Resolution Committee, then the competent court. Each stage has its own clock and its own admission conditions — the Committee will not accept an objection unless the tax connected to it has been paid in full — and those conditions are set out in full on the penalties pillar rather than repeated here.
#Where the official penalties PDF is, and one defect inside it
The document people are searching for when they look for a UAE VAT penalties PDF is the consolidated Cabinet Decision No. 40 of 2017 and its amendments, published by the Ministry of Finance and hosted in the FTA legislation library. It is free, it is ten pages, and it carries a four-line block at the top listing all four instruments in the chain with their issue and effective dates. That block is the fastest date-check there is: if a page or a download you are reading quotes 2%, 4% or 300% for late payment, it predates 14 April 2026 and the block will tell you so in seconds.
Two companion texts belong beside it. Federal Decree-Law No. 28 of 2022 on Tax Procedures supplies the assessment power, the two-times ceiling, the limitation period, the dispute ladder and the waiver power. Cabinet Decision No. 52 of 2017, the VAT Executive Regulation, supplies the deadlines the penalties attach to — the 28th day for filing and payment, the 30 days for registration and the 20 business days for deregistration. Third-party PDFs circulating under titles like "UAE VAT penalties list" are usually the 2021 consolidation with a new cover.
One genuine defect in the primary text is worth flagging, because it looks like an error in any page that quotes it and is not. Article 5 of Cabinet Decision No. 40 of 2017 still directs a person objecting to an administrative penalty to the procedures in Federal Law No. 7 of 2017 on Tax Procedures. Article 55(1) of Federal Decree-Law No. 28 of 2022 repealed that law. Cabinet Decision No. 129 of 2025 rewrote Tables 1 and 3 and left Article 5 untouched, so the consolidated text as published still cross-refers to a repealed statute. The live objection route is the one in the current Decree-Law. Checked in the published consolidation on 17 August 2026.
#What this page does not state, and why
Refusing to publish a number is more useful than guessing one when someone is about to file on the strength of it.
- A monthly percentage for the late-payment charge. The decision states 14% per annum and charges it for each month or part thereof. It does not publish the apportionment, and the FTA has not either. Dividing 14 by 12 is an inference presented as a statutory figure wherever you see it.
- The two-times ceiling as an applied cap. Article 24(4) is displayed above and deliberately not applied, because the text does not resolve whether it bites per penalty or per assessment.
- Which rate applies to months either side of 14 April 2026. No transitional provision appears in the consolidated text and no guidance settling it could be found.
- The terms of Cabinet Decision No. 108 of 2021. That text could not be opened from an official source, so nothing is restated from it and the redetermination relief it followed should be treated as closed.
- Any corporate tax figure by analogy. Corporate tax penalties come from Cabinet Decision No. 75 of 2023, which charges late filing monthly rather than as a flat amount and uses the opposite monthly anniversary rule.
- Your own exposure, a waiver success rate, or a fee. Penalties are assessed on the EmaraTax ledger and that ledger is the only authoritative figure. This firm publishes no case studies, statistics or prices, and none are invented here.
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 and Tax Procedures penalties rewrite, effective 14 April 2026)
- Cabinet Decision No. 49 of 2021 (the superseded 2%, 4% and 300% late-payment formula)
- Cabinet Decision No. 108 of 2021
- Table 1 of Cabinet Decision No. 40 of 2017 (Tax Procedures violations)
- Table 2 of Cabinet Decision No. 40 of 2017 (excise violations)
- Table 3 of Cabinet Decision No. 40 of 2017 (VAT violations)
- Article 5 of Cabinet Decision No. 40 of 2017 (objections, still cross-referring to a repealed law)
- Federal Decree-Law No. 8 of 2017 on Value Added Tax
- Article 21 of the VAT Law (compulsory deregistration)
- Cabinet Decision No. 52 of 2017 (VAT Executive Regulation)
- Article 7 of the VAT Executive Regulation (mandatory registration, 30 days)
- Article 14 of the VAT Executive Regulation (deregistration, 20 business days)
- Article 14 bis of the VAT Executive Regulation (deregistration initiated by the Authority)
- Cabinet Decision No. 100 of 2024 (amendment to the VAT Executive Regulation)
- Article 64 of the VAT Executive Regulation (return and payment deadline)
- 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 20 of the Tax Procedures Law (cooperation during a tax audit)
- Article 24(4) of the Tax Procedures Law (two-times ceiling on an administrative penalty)
- 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 Law No. 7 of 2017 on Tax Procedures (repealed)
- 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. 75 of 2023 on Administrative Penalties for Corporate Tax
- 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 2026 — Tables 1, 2 and 3 and Article 5Federal Tax Authority, as published by the Ministry of Finance
- Federal Decree-Law No. 28 of 2022 on Tax Procedures and its amendments — Articles 24(4), 50 and 55Federal Tax Authority, as published by the Ministry of Finance
- Executive Regulation of the VAT Law, Cabinet Decision No. 52 of 2017 and its amendments — Articles 7, 14, 14 bis and 64Federal Tax Authority
- Cabinet Decision No. 49 of 2021, the superseded schedule carrying the 2%, 4% and 300% late-payment formulaFederal Tax Authority
- Cabinet Decision No. 105 of 2021 on the controls for paying administrative penalties by instalments and for waiving and refunding themFederal Tax Authority
- Cabinet Decision No. 75 of 2023 and its amendments on corporate tax administrative penalties, for the 14% rate in force since 1 August 2023 and the differing monthly anniversary rule in Article 3UAE Ministry of Finance
- Requests for instalment, waiver and refund of administrative penalties: conditions, fee and service timeFederal Tax Authority
- FTA legislation library, where the consolidated penalties PDF and its effective-date block can be downloadedFederal 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
What is the penalty for VAT in the UAE?
It depends on the violation. Under Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025, registering late costs AED 10,000, filing a return late costs AED 1,000 and then AED 2,000 for a repeat within 24 months, an incorrect return costs AED 500, and unsettled tax carries a monthly penalty of 14% per annum. Invoicing failures cost AED 2,500 for each detected case.
What is the penalty for a late VAT return in the UAE?
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 for each return, not a monthly charge, and the 24-month repeat window is rolling rather than tied to a calendar or tax year. Filing late and paying late are separate penalties, so a return filed late but paid on time still costs AED 1,000.
What is the VAT delay penalty in the UAE?
Late payment of VAT carries a monthly penalty of 14% per annum, for each month or part thereof, on the unsettled payable tax, running from the day after the due date and on the same date monthly afterwards. This replaced the old 2% immediate charge plus 4% monthly capped at 300% on 14 April 2026. The decision publishes no monthly percentage, so no honest source can convert the annual rate for you.
What is the VAT deregistration penalty in the UAE?
AED 1,000 on late submission of the deregistration application and the same amount on the same date monthly, up to a maximum of AED 10,000, under item 4 of Table 1. The application is due within 20 business days of the triggering event under Article 14 of the VAT Executive Regulation. Because it compounds monthly on a dormant company, the full ceiling is reached after ten months of inaction.
How can I remove or reduce a VAT penalty in the UAE?
Four routes exist. Correct an error within the return deadline and the incorrect-return penalty does not apply at all. File a voluntary disclosure before the FTA notifies an audit and you avoid the fixed 15% surcharge. Apply under Article 50 of the Tax Procedures Law for a waiver, instalments or a refund, which a committee decides on nine listed grounds. Or dispute the decision itself through reconsideration and the Tax Disputes Resolution Committee.
Where can I download the UAE VAT penalties PDF?
From the Federal Tax Authority legislation library, as the consolidated Cabinet Decision No. 40 of 2017 and its amendments published by the Ministry of Finance. It is ten pages and free. Check the four-line block at the top listing the 2017 decision and its 2021, 2021 and 2025 amendments: any copy that does not show Cabinet Decision No. 129 of 2025 effective 14 April 2026 is out of date.