Administrative Penalties Imposed for Violating the States Tax Laws

The following is a full text released by the UAE Cabinet on Administrative Penalties Imposed for Violating the State’s Tax Laws. We have published an article on UAE tax penalties reduction and discounts (click on the link) on May 6, 2021 in a condensed form. Below is a detailed information on VAT penalties. This is an exact extract of the resolution being shared for readers benefit.

United Arab Emirates

The Cabinet

Cabinet Resolution No. (49) of 2021 Amending Some Provisions of Cabinet Resolution No. (40) of 2017 On Administrative Penalties Imposed for Violating the State’s Tax Laws

The Cabinet, having perused to:

The Constitution;
Federal Decree-Law No. (13) of 2016 on the Establishment of the Federal Tax Authority;
Federal Law by Decree No. (14) of 2016 on Violations and Administrative Penalties in the Federal Government;
Federal Law No. (7) of 2017 on Tax Procedure;
Federal Law No. (7) of 2017 on Excise Tax;
Federal Law No. (8) of 2017 on Value-Added Tax;
Federal Decree-Law No. (26) of 2019 on Public Finance; and
Cabinet Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Law in the UAE.
And based on the presentation of the Minister of Finance and the approval of the Cabinet;

The Cabinet resolved as follows:

Article (1)

Replacement of Tables

The below tables shall replace the tables on the administrative violations and penalties attached to Cabinet Resolution No. (40) of 2017 on Administrative Penalties imposed on violations to the tax laws of the UAE:

Table No. (1) On Administrative Violations and Penalties related to the application of Federal Law No. (7) of 2017 on Tax Procedure
No.	Violation Description	Administrative Penalty (AED)
1.	The person doing business failed to keep the required records and other information specified in the Tax Procedure Law and the tax law.	(1,000) for the first time. (2,000) in case of repetition.
2.	The person doing business failed to submit data, records and documents related to tax in Arabic to FTA upon request.	(20,000)
3.	The taxable person failed to submit the registration application within the time limit specified in the tax law.	(10,000)
4.	The Registrant failed to submit a request to cancel the registration within the time limit specified in the tax law.	(1,000) upon delay in submitting the application and on the same date per month, with a maximum of (10,000)
5.	The Registrant failed to inform FTA of any situation that may require amending the information related to its tax record kept with FTA.	(5,000) for the first time. (10,000) in case of repetition.
6.	The legal representative of the taxable person failed to report its appointment as a legal representative of the taxable person within the specified dates, provided that the penalties in this case shall be from the legal representative’s own money.	(10,000)
7.	The legal representative of the taxable person failed to submit the tax return within the specified dates, within the specified dates, provided that the penalties in this case shall be from the legal representative’s own money.	(1,000) for the first time. (2,000) in case of repetition within (24) months.
8.	The Registrant failed to submit the tax return within the time limit specified in the tax law.	(1,000) for the first time. (2,000) in case of repetition within (24) months.
9.	The taxable person failed to pay the tax shown as a tax payable in the tax return or voluntary declaration that was submitted, or the tax assessment that was notified within the time limit specified in the tax law.	1. The taxable person shall pay the penalty applicable to the late payment of the payable tax, with a maximum of (300%), in accordance with the following: a) (2%) of the unpaid tax due on the day following the due date for payment, upon late payment of the payable tax. b) (4%) monthly penalty due after one month from the payment due date, and on the same date every month after that, on the amount of tax that has not been paid to date. 2. For the purposes of this penalty, the due date for payment in the event of voluntary declaration and tax assessment is as follows: a) In the case of the voluntary declaration, (20) business days from the date of its submission. b) In the case of tax assessment, (20) business days from the date of its receipt.
10.	The Registrant submitted an incorrect tax return.	1. A fixed penalty is imposed: (1,000) for the first time. (2,000) in case of repetition. 2. As an exception to Clause (1) of this penalty, if the incorrect tax return results in a tax difference less than the fixed fine mentioned in Clause (1) of this penalty, a fine equal to the tax difference shall be imposed, provided it is not less than AED (500). 3. Whoever corrects its tax return before the payment due date shall be exempted from the penalty specified in Clauses (1) and (2) of this penalty.
11.	The person / taxpayer makes a voluntary declaration of errors in the tax return, tax assessment or tax refund application, in accordance with Clauses (1) and (2) of Article (10) of the Tax Procedures Law.	Without prejudice to the consequences of the penalty mentioned in Clause (10) hereof, a proportional penalty shall be imposed on the amount of the difference between the tax calculated and the tax that should have been calculated, in accordance with the following: 1. (5%) on the difference amount in the event that the voluntary declaration was submitted within one year of the due date of the tax return, tax assessment, or related refund application. 2. (10%) on the difference amount in the event that the voluntary declaration was submitted during the second year from the due date of the tax return, tax assessment, or related refund application. 3. (20%) on the difference amount in the event that the voluntary declaration was submitted during the third year from the due date of the tax return, tax assessment, or related refund application. 4. (30%) on the difference amount in the event that the voluntary declaration was submitted during the fourth year from the due date of the tax return, tax assessment, or related refund application. 5. (40%) on the difference amount in the event that the voluntary declaration was submitted after the fourth year from the due date of the tax return, tax assessment, or related refund application.
12.	The person / taxpayer fails to make a voluntary declaration of an error in the tax return, tax assessment or tax refund application, in accordance with Clauses (1) and (2) of Article (10) of the Tax Procedures Law, before being notified of FTA’s tax audit.	Without prejudice to the consequences of the penalty mentioned in Clause (10) hereof, shall be imposed a person: 1. A penalty of (50%)on the amount of error; 2. A penalty of (4%) for each month or part of the month from any of the following: a) Tax unpaid to FTA, from the date that payment is due for the relevant tax period until the date of receipt of the tax assessment. b) The tax that has not been refunded to FTA due to an unjust tax refund, from the date of the tax refund from FTA until the date of receiving the tax assessment.
13.	The person doing business failed to provide facilities to the tax auditor in violation to the provisions of Article (21) of the Tax Procedure Law.	(20,000)
14.	The Registrant failed to calculate tax on behalf of another person when the registered taxable person is obligated to do so in accordance with the tax law.	1) The Registrant shall pay the penalty applicable to the late payment of the payable tax, with a maximum of (300%), in accordance with the following: a) (2%) of the unpaid tax due on the day following the due date for payment, upon late payment of the payable tax. b) (4%) monthly penalty due after one month from the payment due date, and on the same date every month after that, on the amount of tax that has not been paid to date. 2) For the purposes of this penalty, the due date for payment in the event of voluntary declaration and tax assessment is as follows: a) In the case of the voluntary declaration, (20) business days from the date of its submission. b) In the case of tax assessment, (20) business days from the date of its receipt.
15.	The taxable person failed to calculate any tax that may be due on importing goods in accordance with the tax law.	(50%) of unpaid or undeclared tax.

Table No. (2) On Administrative Violations and Penalties related to the application of Federal Decree-Law No. (7) of 2017 on Excise Tax
No.	Violation Description	Administrative Penalty (AED)
1.	The taxable person failed to present the prices as inclusive of the tax.	(5,000)
2.	Failure to comply with the conditions and procedures for transporting the excise goods from one designated zone to another, and the mechanism of preserving, storing and processing them in it.	The penalty shall be the higher of ← Previous Post Next Post → Contact Us Name Email Phone number Select Your Services How can we help? Recent Blog Posts May 22, 2026 \| Business Spectrum Times – May 2026 Newsletter May 09, 2026 \| Audit IFRS 18 Presentation and Disclosure in Financial Statements May 09, 2026 \| Business UAE Equivalency Certificate: What You Really Need to Know May 09, 2026 \| Accounting Profit is Vanity, Cash is Sanity: Why UAE Businesses Go Broke While “Profitable” May 09, 2026 \| eInvoicing Unlocking Growth: A Guide to Dual Licensing in Dubai Categories Accounting AML Audit Business Corporate Tax Cryptocurrency Economy eInvoicing Entrepreneurs ESG ESR and CbCR IFRS Internal Audit Taxes Technology VAT Linkedin X-twitter Youtube Facebook Instagram Branch Offices : Abu Dhabi, UAE Sharjah, UAE Texas, USA Hyderabad, India Muscat, Oman Services In-Country Value (ICV) Certification Environmental Social and Governance (ESG) Audit Tax Residency Certificate Accounting Outsourcing Transfer Pricing CT Impact Assessment PRO Services Liquidation Business Setup Internal Audit VAT Health check VAT Amendment Value Added Tax (VAT) CFO & Accounting Audit & Assurance Services Corporate Tax & Transfer Pricing Business Consultancy Risk Advisory & Internal Audit Spectrum Auditing 202, Al Nasr Plaza Commercial Building (Office Block), Next to Oud Metha Metro Station Exit 1, Oud Metha, Dubai, UAE.  P.O.Box : 26053 +971-50-986-6466 +971-4-269-9329 [email protected] V.Balaram & Associates 10-2-277/a, A M G Plaza, West Maaredpally, Secunderabad, Telangana – 500026, India +91 98664 05288 [email protected] Spectrum Auditing Unit 801-4A, 8th Floor, Al Saman Tower-A, Hamadan Bin Mohammed St (Beside capital Park), Al Danah, Abu Dhabi, UAE. P.O.Box : 26053 +971-50-986-6466 +971-4-269-9329 [email protected] Spectrum Auditing © 2026 \| Terms & Conditions \| Privacy Policy \| Cancellation & Refund Policy This website uses cookies to improve your experience.