UAE Corporate Tax Penalties: What They Are and How to Stay Clear of Them.

Corporate Tax penalties in the UAE come from a fixed schedule annexed to Cabinet Decision No. 75 of 2023, and most of them are charged by the month. That makes them predictable, and it means a small delay keeps adding up until it is fixed. For businesses with a 31 December 2025 year end, the return is due by 30 September 2026.

The deadline everything hangs on

A taxable person must file its Corporate Tax return and pay the tax due within 9 months of the end of its tax period. Both are done through EmaraTax. Most of the penalties below start from the day after that deadline.

Late filing of the return

If a registrant does not submit its return on time, the penalty is:

• AED 500 for each month, or part of a month, for the first twelve months.
• AED 1,000 for each month, or part of a month, from the thirteenth month onwards.

The penalty starts the day after the deadline and repeats on the same date each month. Because it runs by the month or part of a month, filing one day late costs the same as filing a month late.

Late payment of tax

Unpaid Corporate Tax attracts a monthly penalty at a rate of 14% per annum on the unsettled amount, for each month or part of a month, starting the day after the due date.

This rate is not new for Corporate Tax. It has been in the Corporate Tax schedule since 1 August 2023. What changed on 14 April 2026 was the separate VAT and Excise Tax schedule: Cabinet Decision No. 129 of 2025 amended Cabinet Decision No. 40 of 2017 and moved VAT and Excise late payment onto the same 14% basis.

Two special due dates apply for this penalty. Tax arising from a voluntary disclosure is due 20 business days after the disclosure is submitted. Tax arising from an FTA tax assessment is due 20 business days after it is received.

Incorrect returns and voluntary disclosure

Mistakes are treated differently depending on when they are found and who finds them.

• Corrected before the deadline. An incorrect return carries an AED 500 penalty, unless you correct it before the filing deadline.
• Found by you after the deadline. The Tax Procedures Law requires a voluntary disclosure where a return understated the tax payable. The penalty is 1% of the tax difference for each month or part of a month, from the day after the original return was due until the disclosure is submitted.
• Not disclosed before an audit notice. If you have not disclosed the error before the FTA notifies you of a tax audit, the schedule adds a fixed penalty of 15% of the tax difference on top of the 1% monthly penalty.

Records and information

The Corporate Tax Law requires records to be kept for seven years after the end of the tax period they relate to. The schedule sets:

• Failure to keep the required records: AED 10,000 for each violation, or AED 20,000 for a repeat within 24 months.
• Failure to provide tax documents in Arabic when requested: AED 5,000.
• Failure to tell the FTA about a change to your tax record details: AED 1,000, or AED 5,000 for a repeat within 24 months.
• Late deregistration application: AED 1,000 a month, up to a maximum of AED 10,000.

Late registration

Since 1 March 2024, a taxable person that does not submit its Corporate Tax registration application within the timeframe set by the FTA faces a penalty of AED 10,000. This was added to the schedule by Cabinet Decision No. 10 of 2024.

The FTA runs a waiver for this penalty. Under its public clarification CTP006, the penalty is waived, and refunded to the EmaraTax account if already paid, where the first Corporate Tax return is filed within seven months of the end of the first tax period instead of nine. It applies to the first tax period only, and it does not change the deadline for paying the tax, which remains nine months.

A worked example

"Our tax period ended on 31 December 2025, so the return and payment were due on 30 September 2026. We expect to owe AED 120,000 and we are worried we will be three months late."

• Late filing. Three months at AED 500 a month is AED 1,500.
• Late payment. 14% a year on AED 120,000 is AED 16,800 a year. Charged monthly, that is about AED 1,400 for each month or part of a month, so around AED 4,200 for three months. EmaraTax shows the exact figure.
• A later error. Suppose you then find the return understated tax by AED 20,000 and you disclose it six months after the original due date. The penalty is 1% of AED 20,000 for six months, which is AED 1,200, and the extra AED 20,000 is due 20 business days after the disclosure. Had the FTA announced an audit first, a fixed AED 3,000 (15%) would be added.

Reconsideration

If you disagree with a penalty, the Tax Procedures Law lets you ask the FTA to reconsider its decision. The request must set out reasons and be made within 40 business days of being notified of the decision. It is submitted through EmaraTax. If you disagree with the outcome, the next step is an objection to the Tax Disputes Resolution Committee, which requires the tax concerned to be paid in full first.

Reducing the risk in practice

• Diarise the nine-month deadline for both the return and the payment, not just one of them.
• Close the books early. A return prepared in the last week leaves no time to spot errors before the deadline, when correcting them is free.
• Review the filed return after submission, and disclose quickly if something is wrong. The 1% runs every month you wait.
• Keep records in order for seven years, and be ready to provide Arabic versions if asked.
• Update your tax record in EmaraTax when your trade licence, address or other details change.

Clean monthly bookkeeping is the single biggest help. A return built on reconciled accounts is faster to prepare and less likely to need a disclosure later.

How we help

We keep clients' books up to date through the year, prepare the return in good time through our Corporate Tax filing service, and report the filing and payment dates well ahead of each deadline. Where we find an error in an earlier return, we explain the disclosure position so you can decide what to do.

Frequently asked questions

What is the late payment penalty for UAE Corporate Tax?

The schedule annexed to Cabinet Decision No. 75 of 2023 sets a monthly penalty at a rate of 14% per annum, for each month or part of a month, on the unpaid tax. It starts the day after the payment due date.

Is the late filing penalty charged even if no tax is due?

The late filing penalty is tied to the return, not to the tax. The schedule sets AED 500 for each month or part of a month for the first twelve months, then AED 1,000 a month, for a registrant that does not file within the deadline.

Can I fix a mistake in my return without a penalty?

If you correct the return before the filing deadline, the AED 500 penalty for an incorrect return does not apply. After the deadline, errors that understate tax are corrected by voluntary disclosure, which carries a 1% monthly penalty on the tax difference.

How long do I have to ask the FTA to reconsider a penalty?

The Tax Procedures Law allows a reconsideration request, with reasons, within 40 business days of being notified of the decision.