Failure to meet UAE Corporate Tax registration, record-keeping, return-filing, payment and disclosure requirements can result in administrative penalties. Businesses should understand these obligations early because some Corporate Tax fines increase monthly until the outstanding requirement is completed.
VAT Accounting UAE helps mainland companies, free zone entities, startups, SMEs and other taxable persons review their Corporate Tax compliance. Our services include registration assistance, accounting-record reviews, taxable income calculations, return preparation, voluntary disclosure support and penalty assessments.
If your business has received a Corporate Tax penalty or missed an FTA deadline, contact VAT Accounting UAE on +971 52 406 3000 or email info@vataccountinguae.com.
What Are UAE Corporate Tax Fines?
Corporate Tax fines are administrative penalties imposed by the Federal Tax Authority when a person fails to comply with the UAE Corporate Tax Law, Tax Procedures Law or related implementing decisions.
Penalties may apply when a taxable person fails to register on time, submits a late return, delays payment, provides an incorrect return, fails to retain the required records or does not cooperate during a tax audit.
The amount depends on the type of violation, the length of the delay, whether the violation has been repeated and whether the taxpayer corrected an error before receiving a tax-audit notification.
UAE Corporate Tax Penalties
The following table summarises several important UAE Corporate Tax fines. It is not an exhaustive list, and the amount applicable to a business should be confirmed against its circumstances and the latest legislation.
| Corporate Tax violation | Administrative penalty |
|---|---|
| Failure to register within the specified timeframe | AED 10,000 |
| Failure to retain required records and information | AED 10,000 for each violation |
| Repeated record-keeping violation within 24 months | AED 20,000 |
| Failure to provide tax records in Arabic when requested | AED 5,000 |
| Late Corporate Tax deregistration application | AED 1,000 monthly, up to AED 10,000 |
| Failure to update tax-registration information | AED 1,000 for each violation |
| Repeated failure to update information within 24 months | AED 5,000 |
| Late Corporate Tax return | AED 500 monthly for the first 12 months |
| Late return after the first 12 months | AED 1,000 monthly from the thirteenth month |
| Incorrect Corporate Tax return | AED 500, subject to the applicable correction rule |
| Failure to facilitate an FTA tax audit | AED 20,000 |
A month or part of a month may be counted when calculating certain monthly penalties. Businesses should therefore take corrective action as soon as a missed requirement is identified.
Late Corporate Tax Registration Fine
Taxable persons must register for Corporate Tax within the timeline applicable to their legal form, incorporation date, residency and business activities. Failure to submit the registration application within the prescribed period can result in a late-registration penalty of AED 10,000.
Registration timelines are not identical for every taxable person. A UAE Resident Juridical Person incorporated or established on or after 1 March 2024 must generally apply within three months from its date of incorporation, establishment or recognition.
Different timelines apply to entities established before that date, non-resident persons, permanent establishments and natural persons conducting business activities in the UAE.
Corporate Tax Late-Registration Penalty Waiver
The FTA has implemented an initiative that may allow eligible taxable persons and exempt persons required to register to obtain a waiver of the AED 10,000 late-registration penalty.
To satisfy the principal timing condition, a taxable person must generally submit its first Corporate Tax return within seven months from the end of its first tax period. An eligible exempt person must generally submit its first annual declaration within seven months from the end of its first financial year.
The seven-month period is a special condition for the late-registration penalty waiver. It should not be confused with the standard Corporate Tax return deadline, which is generally nine months from the end of the applicable tax period.
Eligibility should be checked against the latest FTA requirements. Businesses should not assume that every late-registration penalty will automatically be cancelled.
Fine for Late Corporate Tax Return Filing
A taxable person must generally submit its Corporate Tax return within nine months from the end of the relevant tax period.
Failure to file within the required timeframe can result in a penalty of AED 500 for each month or part of a month during the first 12 months. From the thirteenth month onward, the penalty increases to AED 1,000 for each month or part of a month.
A company may still have a filing responsibility when it has no Corporate Tax payable, qualifies for a 0% rate or has made a tax loss. Free zone status does not automatically remove the requirement to register and file a return.
Penalty for Late Corporate Tax Payment
Corporate Tax payable must generally be settled within nine months from the end of the applicable tax period.
According to the applicable penalties decision, late payment can attract a monthly penalty calculated at 14% per annum on the unsettled payable tax, applied for each month or part of a month from the day following the payment deadline.
Businesses should calculate their liability and arrange payment before the final date. Initiating payment at the last minute may create a risk if processing is delayed or the payment is not properly allocated in EmaraTax.
Penalties for Incorrect Returns and Tax Errors
Submitting an incorrect Corporate Tax return can result in an AED 500 penalty unless the person corrects the return before the filing deadline, in accordance with the applicable rule.
When an error produces a tax difference, additional penalties may apply. A voluntary disclosure submitted before a tax-audit notification can attract a monthly penalty of 1% of the tax difference for each month or part of a month, calculated under the relevant rules.
If a required voluntary disclosure is not submitted before the taxpayer receives a tax-audit notification, a fixed penalty of 15% of the tax difference may apply, together with the applicable monthly penalty.
Businesses should review suspected errors promptly rather than waiting for the FTA to initiate an audit.
Record-Keeping Penalties
Taxable persons must maintain records that allow the FTA to verify taxable income and the information reported in the Corporate Tax return.
Failure to retain the required records can result in an AED 10,000 penalty for each violation. A repeated violation within 24 months can result in a penalty of AED 20,000.
Corporate Tax records generally need to be retained for at least seven years following the end of the relevant tax period. These records may include financial statements, ledgers, invoices, agreements, bank records, asset schedules, expense documents and Related Party information.
How to Avoid Corporate Tax Fines
Businesses can reduce their compliance risk by confirming their registration status, financial year, tax period and return deadline well in advance.
Accounting records should be reconciled regularly, and material transactions should be supported by proper documentation. Related Party and Connected Person transactions should be identified and reviewed before the Corporate Tax return is prepared.
EmaraTax information should also be kept current. Changes to the business name, address, licence, activities, ownership or authorised signatories may need to be reported within the applicable timeframe.
How VAT Accounting UAE Can Help
VAT Accounting UAE provides practical assistance to businesses facing Corporate Tax compliance issues. We can review the reason for a penalty, assess outstanding obligations and help prepare the information required to correct the compliance position.
Our services include:
- Corporate Tax registration assistance
- Corporate Tax penalty assessment
- Accounting and bookkeeping review
- Corporate Tax return preparation
- Taxable income calculation
- Voluntary disclosure support
- Free zone Corporate Tax review
- EmaraTax compliance assistance
- Corporate Tax record-keeping support
Frequently Asked Questions
What is the fine for late Corporate Tax registration in the UAE?
Failure to submit a Corporate Tax registration application within the prescribed timeline can result in an administrative penalty of AED 10,000.
What is the penalty for filing a Corporate Tax return late?
The penalty is AED 500 for each month or part of a month during the first 12 months. It increases to AED 1,000 monthly from the thirteenth month onward.
Is there a fine for paying Corporate Tax late?
Late payment may attract a monthly penalty calculated at 14% per annum on the unsettled payable tax, applied according to the applicable penalty rules.
Can the AED 10,000 registration penalty be waived?
Eligible persons may benefit from the FTA’s late-registration penalty-waiver initiative if they satisfy its conditions, including filing the first return or annual declaration within the specified seven-month period.
What is the penalty for not keeping Corporate Tax records?
Failure to retain required records can result in an AED 10,000 penalty for each violation. A repeated violation within 24 months can result in an AED 20,000 penalty.
What should I do after receiving a Corporate Tax fine?
Review the penalty and your EmaraTax account immediately, identify the outstanding obligation and complete any required registration, return, payment or disclosure. Professional assistance may be helpful when the reason for the penalty is unclear or an error needs to be corrected.
Get Help With UAE Corporate Tax Fines
If your business has missed a deadline, received a penalty or discovered an error in a Corporate Tax return, take corrective action promptly.
Contact VAT Accounting UAE for a Corporate Tax penalty review and compliance assessment.
Phone: +971 52 406 3000
Email: info@vataccountinguae.com
Address: Office No. 520, Al Nasr Plaza, Oud Metha Road, next to Oud Metha Metro Station, Dubai, United Arab Emirates