UAE tax legislation governing corporate tax consists of numerous legal acts, making it difficult to quickly identify applicable penalty deadlines and grounds. As a result, a clear understanding of the procedural rules for appealing tax penalties is essential.
Below is an overview designed to help taxpayers avoid common violations and protect their rights in the event of a dispute with the tax authority.
| No | Violation | Deadline for Compliance | Penalty Amount (AED) |
| 1 | Failure to submit tax registration application on time | 3 months from incorporation – residents; 6 months from the end of the financial year – non-residents (Art. 3, Federal Decree-Law No. 28 of 2022) | 10,000 |
|
2 |
Failure to submit tax deregistration application | 3 months from cessation of activity (individuals); 3 months from liquidation or cessation (legal entities) (Art. 2, FTA Decision No. 6 of 2023) |
1,000 per violation + 1,000 per month of delay (cap: 10,000) |
| 3 | Violation of accounting record-keeping rules | Retention period: 5–7 years, extendable by 4 additional years (Cabinet Decision No. 74 of 2023) | 10,000 per violation; 20,000 for repeat violation within 24 months |
| 4 | Failure to provide data/documents upon request | 30 days from request for transfer pricing documentation | 5,000 |
| 5 | Failure to notify changes in registration data | 20 days (Art. 6(4), Cabinet Decision No. 74 of 2023) | 1,000; 5,000 for repeat violation within 24 months |
| 6 | Failure to notify appointment of a representative | 20 days from appointment (Art. 7, Federal Decree-Law No. 28 of 2022) | 1,000 |
| 7 | Failure to cooperate during a tax audit | — | 20,000 |
Tax Payment and Tax Returns
| No | Violation | Deadline | Penalty Amount |
|
1 |
Late submission of tax return | Within 9 months after the end of the tax period (Art. 53, Federal Decree-Law No. 47 of 2022) | AED 500 per month/part of month for first 12 months (from April 2026 – AED 1,000); AED 1,000 per month from month 13 (from April 2026 – AED 2,000 for repeat violation within 24 months) |
| 2 | Non-payment of tax | Within 9 months after the end of the tax period | Late payment interest at 14% per annum on unpaid tax (Art. 48, Federal Decree-Law No. 47 of 2022) |
| 3 | Submission of an incorrect tax return | From detection or submission of an amended return after 9 months | 500 |
| 4 | Voluntary disclosure of errors | From submission of amended return after 9 months | 1% per month of the tax difference |
| 5 | Failure to submit voluntary disclosure before audit notification | From detection after filing deadline | 15% of tax difference + 1% per month/part of month |
Criminal Liability for Tax Violations in the UAE
UAE legislation also provides for criminal liability under Article 25 of Federal Decree-Law No. 28 of 2022 on Tax Procedures, including:
Intentional tax evasion of payable taxes and penalties
Deliberate understatement of revenue to avoid registration thresholds or tax limits
Intentional reduction of payable tax or participation in tax evasion schemes
Intentional acts or omissions constituting tax evasion
Submission of false information or incorrect documents to the Authority
Concealment or destruction of documents required to be maintained and submitted
Obstruction of FTA officers in the performance of their duties
Penalty Appeal Procedure
A penalty decision may be challenged by submitting an application to the Federal Tax Authority (FTA) within 40 business days from the date of the decision (Art. 29, Federal Decree-Law No. 28 of 2022, as amended on 30.09.2024).
If the FTA issues a decision or fails to do so within 45 days, the taxpayer may submit an objection to the Tax Disputes Resolution Committee within 40 business days from the date of the FTA decision.
no prior application submitted to the FTA;
unpaid tax stated in the decision;
missed filing deadline.
The Committee reviews the objection within 20 business days, plus 5 days for issuing the decision.
If the total amount of tax and administrative penalties does not exceed AED 100,000, the Committee’s decision is considered final and enforceable (Art. 34).
If the amount exceeds AED 100,000, the decision may be appealed in court within 40 business days from notification of the Committee’s decision.
Court Appeal Conditions (Art. 36)
A court appeal will not be accepted if:
the case was not previously reviewed by the Committee;
there is no proof of tax payment;
there is no proof of payment of 50% of penalties or submission of an approved bank guarantee in favor of the Authority.
Extension of Deadlines
Under Article 25 of Cabinet Decision No. 74 of 2023, deadlines may be extended:
by 20 business days for the FTA to issue a decision;
up to 60 business days for the Committee to issue its decision.
Upon request, deadlines may also be extended for a period deemed appropriate by the Authority in cases of:
circumstances beyond the taxpayer’s control;
sudden accidents;
emergency or force majeure events preventing timely submission of objections.
