FTA PENALTIES

UAE FTA Penalty Calculator 2026

Select your tax type and violation. See your exact AED penalty, based on Cabinet Decision No. 129 of 2025, effective 14 April 2026.

Read the full FTA penalties 2026 guide →

The UAE Federal Tax Authority (FTA) is the government body responsible for administering and collecting federal taxes: Value Added Tax (VAT), Corporate Tax (CT), and Excise Tax. Established under Federal Decree-Law No. 13 of 2016, the FTA has authority to audit businesses, assess tax liabilities, and impose administrative penalties for non-compliance across all three tax regimes.

On 14 April 2026, Cabinet Decision No. 129 of 2025 reshaped how late-payment penalties work. Late Corporate Tax, VAT, and Excise Tax payments now accrue interest at 14% per annum, calculated daily on the outstanding balance with no maximum cap.

Use this UAE FTA penalty calculator below to see your exact penalty. Select your tax type, the type of violation, and (where applicable) the outstanding amount and number of days late.

Step 1 - Tax Type

Disclaimer: This calculator provides estimates based on publicly available FTA penalty schedules. Actual penalties may vary based on individual circumstances, FTA discretion, and voluntary disclosure timing. This is not legal advice. Consult a qualified tax professional for your specific situation.

UAE FTA Penalty Schedule 2026: Full Reference

The UAE FTA enforces penalties under Cabinet Decision No. 74 of 2017 (as amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026). Below is the complete penalty reference for Corporate Tax, VAT, and Excise Tax violations.

Corporate Tax Penalties

Violation	Penalty
Failure to register for Corporate Tax	AED 10,000 (one-time)
Failure to file CT return on time	AED 500/month (months 1-12); AED 1,000/month thereafter
Failure to pay CT on time	14% per annum on unpaid amount (from 14 April 2026, CD 129/2025)
Failure to maintain required records	AED 10,000 first offence; AED 50,000 subsequent offences
Failure to submit audited financial statements	AED 50,000
Providing incorrect information	AED 1,000 minimum; up to amount of understated tax
Voluntary disclosure (before FTA audit)	5% of unpaid tax
Voluntary disclosure (after FTA audit started)	30% of unpaid tax

VAT Penalties

Violation	Penalty
Failure to register for VAT	AED 20,000
Failure to file VAT return on time	AED 1,000 first offence; AED 2,000 subsequent offences within 24 months
Failure to pay VAT on time	14% per annum on unpaid VAT (from 14 April 2026, CD 129/2025)
Issuing tax invoices incorrectly	AED 5,000 per incorrect invoice
Failure to maintain VAT records	AED 10,000 first offence; AED 50,000 subsequent offences
Failure to display VAT registration number	AED 15,000
Voluntary disclosure (pre-audit)	5% of unpaid tax

Excise Tax Penalties

Violation	Penalty
Failure to register for Excise Tax	AED 20,000
Failure to file Excise return on time	AED 1,000 first offence; AED 2,000 subsequent offences
Failure to pay Excise Tax	14% per annum (from 14 April 2026, CD 129/2025)
Unauthorised import of excise goods	50% of tax due or AED 20,000, whichever is greater

Late Payment Interest: New 2026 Rule

Under Cabinet Decision No. 129 of 2025 (effective 14 April 2026), the FTA replaced the previous fixed-rate late payment penalty structure with an annualised interest model. Late Corporate Tax, VAT, and Excise Tax payments now accrue interest at 14% per annum on the outstanding amount, calculated daily. Businesses with outstanding liabilities should settle immediately to avoid escalating interest charges.

UAE FTA Penalties in 2026: Complete Fine Reference

The UAE FTA administrative penalty framework was overhauled on 14 April 2026 under Cabinet Decision No. 129 of 2025. The previous structure — which combined fixed fines with a 2% immediate plus 4% monthly compounding late payment penalty capped at 300% — was replaced with a simpler interest-based model. Here is the current penalty reference for each major violation.

Late VAT registration penalty: AED 20,000, imposed as a one-time administrative fine the moment the FTA identifies the non-registration. There is no grace period and no warning. The 30-day registration window begins the day after you first cross the AED 375,000 mandatory registration threshold. Missing this window triggers the full AED 20,000 regardless of how long you have been unregistered.

Late VAT return filing: AED 1,000 for the first late filing. AED 2,000 for each subsequent late filing within a 24-month window. These penalties apply even on nil returns — if you are registered for VAT, you must file every return on time regardless of whether you owe any tax.

Late VAT payment: Under CD 129/2025, interest accrues at 14% per annum on the unpaid VAT amount, calculated daily from the day after the due date. There is no minimum payment floor and no cap. AED 100,000 unpaid for 30 days = AED 1,151 in interest charges (100,000 × 14% ÷ 365 × 30).

Corporate tax registration penalty: AED 10,000, one-time. CT registration is mandatory for all UAE businesses — mainland and free zone — regardless of size or taxable income. The deadline is typically 12 months after the start of the first tax period, or earlier in some cases. The AED 10,000 fine applies automatically the day after the deadline without any warning.

E-invoicing non-compliance: Mandatory B2B and B2G e-invoicing begins in July 2026 for large taxpayers in phase 1. Penalties for non-compliant invoices are expected to mirror existing invoice-format penalties: AED 5,000 per incorrectly issued tax invoice. Businesses in scope should ensure their accounting systems are PEPPOL-compliant before the mandatory phase applies to their revenue tier.

How the FTA calculates compound penalties: For late payments under the new CD 129/2025 regime, the interest is simple daily interest — not compound. The formula is: Outstanding Amount × 14% ÷ 365 × Days Late. However, if the underlying penalty (such as the fixed AED 10,000 CT registration fine) itself remains unpaid, that amount also begins accruing interest at 14% per annum from the date the penalty was assessed. Businesses that receive a penalty and do not pay it promptly therefore face double accumulation: the original tax liability interest plus the penalty interest.

FTA Penalty Questions Answered

What is the penalty for late VAT registration in UAE?

The penalty for failing to register for VAT when mandatory is AED 20,000. This is a one-time fixed administrative fine imposed automatically once the FTA identifies the non-registration. VAT registration becomes mandatory when your taxable supplies exceed AED 375,000 in any 12-month period. You have 30 days from the date of crossing the threshold to register on EmaraTax.

How much is the FTA fine for late tax filing?

For VAT: AED 1,000 for the first late return, AED 2,000 for each subsequent late return within 24 months. For Corporate Tax: AED 500 per month for the first 12 months of late filing, then AED 1,000 per month thereafter. These penalties apply even on nil returns. Filing zero-balance returns on time is still mandatory.

Can I negotiate or waive an FTA penalty?

Yes, through the FTA reconsideration process under Article 27 of Federal Law No. 7 of 2017. You must submit a reconsideration request within 40 business days of receiving the penalty notice, with supporting evidence that the violation was caused by reasonable circumstances beyond your control. If denied, you can escalate to the Tax Disputes Resolution Committee within 40 business days, then to the courts.

What is the penalty for not registering for corporate tax?

AED 10,000, one-time. Corporate tax registration is mandatory for all UAE businesses — there is no revenue threshold. The deadline is typically within the first 12 months of the first tax period (9 months for most calendar-year businesses). The penalty is assessed automatically the day after the deadline with no warnings.

How do I calculate my UAE FTA penalty?

Use this calculator to see the exact penalty for your situation. For late payment interest: Outstanding Amount × 14% ÷ 365 × Days Late. For fixed penalties (registration, record-keeping failures): the specific AED amount listed in the penalty schedule applies as a lump sum. Voluntary disclosures made before the FTA initiates an audit attract a 5% penalty on the understated tax instead of the full rate.

FTA Penalty FAQs

Can FTA penalties be reduced or waived?

Yes. The FTA has a reconsideration process under Article 27 of Federal Law No. 7 of 2017. Taxpayers can apply within 20 business days of receiving a penalty notice. Filing a voluntary disclosure before the FTA notifies you significantly improves outcomes.

What is the difference between a voluntary disclosure and an amended return?

A voluntary disclosure is a formal notification to the FTA that you have underpaid tax or made an error. Filing one before the FTA initiates an audit typically reduces the penalty to 5% of the unpaid amount. After an audit begins, the reduction drops to 30%.

What changed with the 14 April 2026 penalty structure?

Cabinet Decision No. 129 of 2025 replaced several fixed-amount penalties with percentage-based and interest-based penalties. The most significant change is the introduction of 14% per annum interest on late payments. All changes took effect on 14 April 2026.

Is there a penalty for paying tax one day late?

For Corporate Tax and VAT (post April 2026), interest begins accruing at 14% per annum from the due date under CD 129/2025. There is no grace period.

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