The Federal Supreme Court has announced the method of calculating late payment penalties on voluntary disclosure.The judgment is significant because the effective date of penalty computation has been confirmed to be the original VAT return submission due date rather than the Voluntary Disclosure submission/ approval date and this will have significant impact on the penalty calculation on Voluntary Disclosures. A voluntary disclosure is obligation when a taxpayer makes a voluntary disclosure of an error or omission in a previous tax return application and should be made before twenty weekdays of discovering the mistake. Following are the various penalties/ charges applicable for a Voluntary Disclosure: 1). Voluntary Disclosure Fees/ penalty:Firstly, if voluntary disclosure is made for the first time then a fixed amount of AED 3,000 is charged and for second and subsequent voluntary disclosures AED 5,000 per disclosure. 2). Percentage based penalty:  Apercentage-based penalty of 5% is calculated on the difference between the value in the voluntary disclosure and original tax return, tax assessment and tax refund application before the notice is issued by the FTA.And if a person makes a voluntary disclosure and makes the required rectification of the error or omission after the FTA audit notice is issued but before the audit then 30 % of the difference. Similarly, in case if the authorized FTA auditor finds the mistake during the course of the audit and the error is rectified then 50% of the difference amount, 3).Late payment penalty:In case of late payment penalty an immediate 2% immediately, 4% after the first week and daily a maximum of 1% until the person reaches a maximum of 300%. Since early 2019, late payment penalties and voluntary disclosure was calculated from the date when the volunteer disclosure is made and there was no retrospective effect but now the federal government has diverted and has decided to consider the voluntary disclosure as a branch of original tax return, hence the penalties to be calculated from the original VAT return related due dates than later dates. For example, if a taxable person finds a