FTA Penalty Calculator
UAE 2026
Calculate your exact penalties for late filing, late payment, and wrong filing. Covers VAT and Corporate Tax under current UAE law.
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Common Penalty Scenarios
| Scenario | Tax Type | Details | Penalty, AED |
|---|---|---|---|
| Filed VAT return 2 months late | VAT | 1st offence, AED 25K tax, paid on filing date | 1,583 |
| Filed one VAT return 6 months late | VAT | Repeat offence, AED 50K tax, single period | 5,500 |
| Wrong filing — VAT (voluntary disclosure, 8 months) | VAT | AED 100K unpaid tax, 8 months | 17,833 |
| Same scenario — FTA audit | VAT | AED 100K unpaid tax, 8 months | 32,833 |
| CT return filed 15 months late | CT | AED 100K tax, paid on filing date | 26,500 |
| 10 non-compliant invoices | VAT | Missing TRN, incorrect amounts | 25,000 |
Figures are per return period. If you've missed multiple periods, the calculator totals each one separately — so the amount may be higher.
Understanding FTA Penalties
UAE Penalty Framework at a Glance
FTA penalties were reformed under Cabinet Decision No. 49 of 2021, with significant VAT amendments effective 14 April 2026. Current penalty categories:
- Late registration & filing — fixed fines from AED 1,000 to AED 10,000, plus late payment interest at 14% per annum (both VAT and CT). CT also adds AED 500–1,000/month filing penalties.
- Wrong filing — depends on how the error is found. FTA audit: 15% of the unpaid tax amount + 1%/month. Voluntary disclosure: 1%/month only (no 15%). Late payment interest at 14% p.a. accrues on top.
- Non-compliant documents — AED 2,500 per invoice or credit note that fails FTA requirements (missing TRN, incorrect amounts, unsigned)
Think Your Tax Return Might Have Errors?
Most wrong-filing penalties come from mistakes you don't spot until it's too late. Common culprits:
- Personal expenses booked as business costs
- Missing or non-compliant invoices
- Incorrect VAT treatment
- Motor vehicle input VAT claims
The penalty grows at 1% per month — and if the FTA finds the error first, they add a 15% fixed penalty on top.
Voluntary disclosure removes the 15% entirely. On AED 100K of unpaid tax, that's AED 15,000 you keep. Use our Tax Helper to estimate your exposure in minutes.
Frequently Asked Questions
What happens if I file my VAT return late?
If you are filing your VAT return late for the first time in 24 months, the penalty will be AED 1,000; however, if this is your second or later offence in the last 24 months, the penalty doubles to AED 2,000. Also, you must pay a late payment interest of 14% per annum (calculated monthly) on any unpaid taxes.
What is a Voluntary Disclosure, and why should I file one?
The FTA allows you to self-report errors in previous tax returns before the FTA discovers them. This option is called a Voluntary Disclosure, and it carries a significantly lower penalty than cases where the FTA discovers errors. The Voluntary Disclosure penalty is AED 500 plus 1% per month on the tax difference, while FTA audits add a 15% fixed penalty on top. So, the earlier the disclosure, the lower the voluntary disclosure fee.
How are Corporate Tax late-filing penalties calculated?
For the first 12 months, late filing fees are AED 500 per month, and from the 13th month onwards, this penalty increases to AED 1,000 per month. You must also note that late filing also results in late payment of Corporate Tax dues, which attracts an interest of 14% per annum on any outstanding tax amount.
Is there a cap on late payment penalties?
No, there are no caps on late payment penalties when it comes to Corporate Tax and Value Added Tax (VAT).
Can I appeal an FTA penalty?
Yes, you must first submit a Penalty Waiver Application to the FTA requesting a reduction or waiver. If this request is denied, file a Penalty Reconsideration Request within 40 business days. If the FTA still doesn't reduce or repeal/waive the penalty, you may escalate the matter to the Tax Disputes Resolution Committee (TDRC) within 40 business days from the day on which the FTA notifies you of its decision.
What is the penalty for VAT deregistration delay?
Once you are required to mandatorily deregister from VAT, you must complete this process within 20 business days. If you miss this deadline, an administrative penalty of AED 1,000 will apply. Then, for each successive month of deregistration delay, additional penalties of up to AED 10,000 will apply. Also, once your VAT deregistration is approved, you have only 28 days to file your final VAT return, or you may face penalties.
How are FTA penalties calculated — fixed or percentage-based?
FTA penalties can be fixed, a percentage, or a combination of both. It varies depending on the type of offence.
How to apply for penalty waiver from the FTA?
You can apply for penalty waivers by filing the Reconsideration Request for VAT-related penalties and by filing a Penalty Waiver Application for Corporate Tax-related penalties. The next escalation in appealing Corporate Tax-related penalties would be filing a Reconsideration Request. The final escalation after filing Reconsideration Requests (for VAT or CT) is to approach the Tax Disputes Resolution Committee (TDRC).
What are the new FTA penalty rules effective April 2026?
The FTA penalty rules that came into effect in April 2026 reduced the penalty fines for various tax-related offences. For instance, the penalty for not submitting data, records, and tax-related documents in Arabic was reduced from AED 20,000 to AED 5,000.
Can I get a penalty waiver for corporate tax in the UAE?
Yes, you can get a penalty waiver for late Corporate Tax registration in the UAE.
What changed in Cabinet Decision No. 129 of 2025 regarding penalties?
Cabinet Decision No. 129 of 2025 came into effect in April 2026. This decision reduced various tax-related penalties significantly.
How can businesses avoid the penalty for incorrect tax returns?
If you correct your Tax Return before the due date of the payment, you do not have to pay the penalty for incorrect Tax Returns.
What is the deadline for paying additional tax resulting from a voluntary disclosure?
You must pay additional taxes resulting from voluntary disclosures within 20 business days.
Need help with penalties?
Our team helps UAE businesses file voluntary disclosures and reduce penalty exposure every day.
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