Request a Call Back
Request a Call Back

UAE Corporate Tax Compliance Guide: Penalties, Voluntary Disclosure, and Filing Deadlines

The UAE corporate tax regime has now moved beyond the initial phase of registration and implementation. For businesses across Dubai, Abu Dhabi, and the wider Emirates, the real challenge lies in staying compliant, meeting deadlines, ensuring accuracy, and avoiding unnecessary penalties.

Failure to comply not only brings financial costs but also risks damaging credibility with regulators, investors, and stakeholders. This blog highlights the key tax penalties in the UAE, explains the process of revising returns, and offers strategies for building a proactive compliance framework.

Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

Understanding UAE CT Filing Penalties

Timeliness is crucial in the world of taxation. The Federal Tax Authority (FTA) has set out clear guidelines under Cabinet Decision No. 75 of 2023, with structured penalties to enforce compliance:

  • Late Registration
    Missing the registration deadline results in a flat penalty of AED 10,000. This is an expensive consequence for what should be a straightforward process.
  • Late Filing of Tax Returns
     Businesses must file within nine months of their financial year-end. Delays incur:
    • AED 500/month for the first 12 months.
    • AED 1,000/month from the 13th month onwards.
  • Late Payment of Corporate Tax
     Filing alone is not enough; timely payment is equally critical. A 14% per annum penalty is applied on unpaid amounts, calculated monthly.
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

How to Correct UAE Corporate Tax Filing Errors

Beyond timeliness, accuracy is a cornerstone of compliance. What happens if you file your return and later discover an error?

The law provides a formal mechanism for correction, but it comes with its own set of rules and potential penalties.

Submitting an incorrect return initially attracts a penalty of AED 500. However, this can be waived if you identify and correct the mistake before the submission deadline passes.

For errors discovered after the filing deadline, the process is more formal and is managed through a Voluntary Disclosure.

Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

How the Voluntary Disclosure Mechanism Works in UAE Corporate Tax

Under Article 10 of the Federal Decree-Law No. 28 of 2022 on Tax Procedures, if you find an error that resulted in an underpayment of tax, you are legally obligated to inform the FTA by submitting a Voluntary Disclosure within 20 business days of discovering the error.

Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

Penalty Structure for Voluntary Disclosure

  • Core Penalty: A monthly 1% penalty on the tax difference, starting from the day after the original due date.
  • Before Audit Notification: Filing disclosure early helps limit exposure to only the 1% penalty.
  • After Audit Notification: If disclosure comes after FTA launches an audit, businesses face both the 1% penalty plus a 15% fixed penalty on the tax difference.
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

Best Practices for Corporate Tax Compliance in UAE

Waiting until the FTA identifies errors is a risky approach. Businesses should implement strong internal systems to safeguard against penalties and compliance issues. Here are four proactive steps:

  1. Systemize Your Deadlines: Use calendars and compliance management software to track all key dates for registration, filing, and payment.
  2. Invest in Record-Keeping: Maintain meticulous financial records as per the law. This not only ensures accuracy but is your primary defense during a tax audit.
  3. Conduct Internal Reviews: Don’t wait for an external audit. Implement periodic internal reviews of your tax calculations and positions before filing.
  4. Seek Expert Advice: Partner with UAE tax consultants for filing, revisions, and disclosures.
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

Stay Proactive, Stay Compliant

The UAE corporate tax framework is clear: accuracy, timeliness, and proactive compliance are non-negotiable.

Penalties for late registration, delayed filing, or inaccurate returns can add up quickly. By implementing compliance systems, maintaining accurate records, and seeking expert tax advisory, businesses can reduce risks and stay ahead of FTA requirements.

We provide expert support in corporate tax registration, filing, and compliance to help businesses avoid costly penalties.

Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 
Select an element to maximize. Press ESC to cancel.
 

Table of Contents

Share This :

Unlock Your Business Financial Potential Today!

Contact Now
Picture of Josey Mathew

Josey Mathew

With over 10 years of experience as a Chartered Accountant, Josey Mathew is a Partner at DX & RISE Consultants. He specializes in financial planning, tax strategies, and corporate structuring. Through his expertise, he has helped businesses grow and stay compliant with regulations, ensuring long-term financial success.

Linkedin
Get Free Consultation Now
Let’s talk
P:+971 50 283 9209
E:info@dxrise.com