Compliance with the UAE corporate tax law is essential to prevent penalties
The UAE’s Federal Tax Authority (FTA) has introduced corporate tax fines and penalties starting from August 1. Businesses that fail to follow the corporate tax law will have to face penalties. The amendments were introduced by the Ministry of Finance, UAE in Cabinet Decision No.75/2023. To avoid these fines, all businesses in the UAE must register for corporate tax and ensure timely payments. This includes mainland and free zone companies. Compliance with the UAE corporate tax law is essential to prevent penalties.
Corporate Tax Penalties in UAE
Penalties will be imposed if the records and information required under the corporate tax law are not maintained accurately and up to date.
- One of these shall apply AED 10,000 for each infraction.
- AED 20,000 for repeated offenses committed within 24 months of the past violation.
The below table provide the list of violations and administrative fines as stated by FTA
| No. | Description of Violation | Administrative Fine Penalty Amount in AED |
| 1 | Late Corporate Tax Registration fine | AED 10,000 |
| 2 | Late Corporate Tax Deregistration fine | A late submission will result in an AED 1,000 penalty, with an additional AED 1,000 added each month, up to a maximum of AED 10,000. |
| 3 | Late Corporate Tax Return Submission fine | • AED 500 per month (or partial month) for the first 12 months • AED 1,000 per month (or partial month) starting from the 13th month, beginning the day after the tax due date. |
| 4 | Unsettled Payable Corporate Tax Fine | • 14% per annum or annually on unsettled Payable Tax, applied per month from the day after the due date of payment. • The payment due date for Voluntary Disclosure is 20 business days from the submission date, and for Tax Assessment, it’s 20 business days from the date of receipt. |
| 5 | Incorrect Corporate Tax Return submission | A penalty of AED 500 will apply unless the individual corrects the Tax Return before the submission deadline, as outlined in the Corporate Tax Law. |
| 6 | Late submission of a Corporate Tax Declaration to the Authority | • For the first 12 months: AED 500 per month • Starting from the 13th month: AED 1,000 per month |
| 7 | Failure to submit tax-related data, records, and documents in Arabic to the Authority upon request | AED 5,000 |
| 8 | Failure to cooperate with the tax auditor during a tax audit | AED 10,000 |
Check Out: Documents Required for Corporate Tax Registration
How Alpha Auditing can help you avoid Corporate tax fines and penalties?
Alpha Auditing can help you avoid corporate tax fines and penalties by ensuring full compliance with UAE tax laws. Our expert team offers comprehensive services including timely corporate tax registration, accurate record-keeping, and prompt submission of required documents. By partnering with Alpha Auditing, you can stay up-to-date with tax regulations, avoid costly mistakes, and prevent any potential fines. Trust us to manage your corporate tax needs efficiently and keep your business in good standing.