Ahmed AbodaifPartner & Co-Founder
Key takeaways
- Corporate Tax penalties are set by Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024.
- Late registration costs AED 10,000 — but it is waived if you file your first return within seven months of the end of your first tax period.
- Late filing costs AED 500 a month for the first 12 months, then AED 1,000 a month, even if no tax is due.
- Late payment is charged at 14% a year, applied monthly on the unpaid tax.
- Correcting an error yourself through a voluntary disclosure costs far less than waiting for an FTA audit.
Where the penalties come from
Administrative penalties for Corporate Tax are listed in Cabinet Decision No. 75 of 2023, in force since 1 August 2023. Cabinet Decision No. 10 of 2024 added the late registration penalty from 1 March 2024. The separate VAT and Excise penalty table was overhauled by Cabinet Decision No. 129 of 2025 from 14 April 2026, but the Corporate Tax table below continues to apply.
The full list of Corporate Tax penalties
| Violation | Penalty (AED) |
|---|---|
| Not registering for Corporate Tax on time | 10,000 (can be waived, see below) |
| Filing the tax return late | 500 a month for the first 12 months, then 1,000 a month |
| Paying the tax late | 14% a year, applied monthly on the unpaid tax |
| Not keeping the required records | 10,000; 20,000 if repeated within 24 months |
| Not providing records in Arabic when the FTA asks | 5,000 |
| Not telling the FTA about changes to your tax record | 1,000; 5,000 if repeated within 24 months |
| Deregistering late | 1,000 a month, up to 10,000 |
| Submitting an incorrect return | 500, unless corrected before the filing deadline |
| Correcting an error through a voluntary disclosure | 1% a month on the tax difference |
| Not disclosing an error before an FTA audit notice | 15% of the tax difference plus 1% a month |
| Not cooperating with an FTA tax auditor | 20,000 |
| Filing a required declaration late | 500 a month for 12 months, then 1,000 a month |
Where a legal representative — such as a liquidator or guardian — fails to notify the FTA of their appointment or to file on time, the penalties come from their own funds.
The late registration waiver
The AED 10,000 late registration penalty is waived if the business files its first Corporate Tax return within seven months of the end of its first tax period — two months earlier than the normal nine-month deadline. Exempt persons that must register qualify by filing their annual declaration within the same seven months.
The waiver covers businesses that registered late, have not registered yet, or have already been charged the penalty. If you already paid it, the FTA refunds it once the condition is met. In practice: if you registered late, register now and file your first return early.
Worked examples
- Late filing: a return due on 30 September filed on 15 January is four months (or part months) late — AED 2,000, even if the tax payable is zero.
- Late payment: AED 50,000 of tax paid three months late — 14% ÷ 12 × 3 months = 3.5%, or AED 1,750.
- Error found later: a business finds it under-declared AED 20,000 of tax and files a voluntary disclosure six months after the return was due — 1% × 6 months = AED 1,200. The extra AED 20,000 must then be paid within 20 business days of the disclosure, or the 14% late-payment charge starts. Had the FTA found it first in an audit, the penalty would start at 15% (AED 3,000) before the monthly charges.
Key deadlines that drive the penalties
- Registration: by the deadline the FTA set for your licence date or, for new businesses, within three months of incorporation.
- Return and payment: within nine months of the end of the tax period. For a financial year ending 31 December 2025, the deadline was 30 September 2026.
- Records: kept for at least seven years after the end of the tax period they relate to.
If you have already been fined
A penalty is an FTA decision. You can ask the FTA to reconsider it on EmaraTax within 40 business days of being notified, giving your reasons and evidence. EmaraTax also has separate services to request a penalty waiver or to pay penalties in instalments, and you can file these alongside a reconsideration request.
How to avoid Corporate Tax penalties
- Register as soon as the business is set up, even if you expect to pay no tax.
- Close your books monthly so the return is a formality, not a project.
- Diarise the nine-month deadline — and the seven-month deadline in your first year if you registered late.
- Keep invoices, contracts and working papers organised for seven years.
- Review your return before filing, and correct mistakes yourself before the FTA finds them.
- Update the FTA within 20 business days when your licence, address, activities or signatories change.
How Business Future CPA helps
We register clients for Corporate Tax, prepare and file returns, check eligibility for Small Business Relief, prepare voluntary disclosures and handle reconsideration requests. See our tax advisory and accounting and bookkeeping services, or start with the UAE Corporate Tax guide.
Frequently asked questions
What is the penalty for late Corporate Tax registration in the UAE?
AED 10,000. It is waived if you file your first Corporate Tax return within seven months of the end of your first tax period, and refunded if you already paid it.
Is there a penalty for filing a nil Corporate Tax return late?
Yes. The late filing penalty — AED 500 a month for the first 12 months, then AED 1,000 a month — applies whether or not any tax is payable.
How is the late payment penalty calculated?
At 14% a year, charged monthly (about 1.17% a month) on the unpaid tax from the day after the due date until it is paid.
Can I appeal a Corporate Tax penalty?
Yes. Submit a reconsideration request on EmaraTax within 40 business days of being notified, with your reasons and evidence. You can also request a waiver or an instalment plan.
Official sources: Federal Tax Authority (FTA) · UAE Ministry of Finance · UAE Legislation portal
This guide is general information based on UAE legislation and official announcements as at the date shown. It is not tax or legal advice for your specific situation — talk to us before you act.