UAE Corporate Tax Penalties: What Late Filing Really Costs

A late corporate tax return in the UAE rarely costs a fortune in one go. It costs a little every month, and the monthly bill keeps running until someone files. The bigger surprise is that UAE corporate tax penalties can apply even when the company owes no tax at all.

This guide sets out the penalty ladder from the primary texts: Cabinet Decision 75 of 2023, Cabinet Decision 40 of 2017 and the Federal Tax Authority (FTA) pages on the waiver. It ends with a worked example for a small foreign-owned company. I opened every source on 16 October 2026.

UAE Corporate Tax Penalties: The Short Answer

Four numbers cover most UAE corporate tax penalties. All four come from the schedule annexed to Cabinet Decision 75 of 2023.

• AED 10,000 for failing to register for corporate tax within the FTA timeline.
• AED 500 a month for a late return, for the first twelve months. Then AED 1,000 a month.
• AED 10,000 for failing to keep the required records, and AED 20,000 for a repeat within 24 months.
• 14% per annum, applied monthly, on corporate tax that is paid late.

The late registration penalty can be waived. The late return penalty cannot be waived by the same route. The rest of this article explains why.

Which Texts Set the Penalties

Three Cabinet Decisions matter, and people mix them up.

Cabinet Decision 75 of 2023 is the corporate tax table. It took effect on 1 August 2023. Article 2 says its schedule applies to corporate tax violations “notwithstanding” Cabinet Decision 40 of 2017. Cabinet Decision 10 of 2024 amended the schedule from 1 March 2024 and added the AED 10,000 late registration penalty. You can read the consolidated text on the Ministry of Finance website.

Cabinet Decision 40 of 2017 is the older general penalty decision. Its current consolidated version covers the Tax Procedures Law, excise tax and VAT, not corporate tax. Two of its articles still matter to you: Article 3 says a penalty does not remove the duty to pay the tax, and Article 5 lets you object under the Tax Procedures Law. The consolidated text is here.

Cabinet Decision 129 of 2025 amended Decision 40 of 2017 and took effect on 14 April 2026. The FTA announcement describes lower penalties for several violations. It amends the VAT, excise and tax procedures schedule. I found no 2025 or 2026 amendment listed in the consolidated corporate tax table, so I have used the Decision 75 table as it stands.

The Penalty Ladder at a Glance

This table lists the UAE corporate tax penalties that affect most foreign-owned companies. The wording is a plain-English summary of the schedule annexed to Cabinet Decision 75 of 2023, with the item number from that schedule.

Late Registration: The AED 10,000 Penalty

The Ministry of Finance announced the late registration penalty when it issued Cabinet Decision 10 of 2024. It applies to businesses that do not file their registration application within the timelines set by the FTA. The ministry notes it matches the late registration penalties for excise tax and VAT.

The timelines depend on the licence date or the company’s status, so I do not repeat them here. Our guide to the UAE corporate tax registration deadline lists them. The point for this article is simpler. The AED 10,000 is a one-off charge, and it is the largest single item in the corporate tax schedule that most small companies will meet.

It also applies to companies that expect to pay nothing. A company that qualifies for UAE Small Business Relief still registers. A free-zone company seeking the Qualifying Free Zone Person status also registers. The penalty attaches to the missed application, not to the tax result.

How the FTA Waiver Works

The FTA launched an initiative to waive the late registration penalty. Its waiver of penalties page sets one condition. The taxable person must submit the tax return within seven months of the end of the first tax period. The normal deadline is nine months. An exempt person who must register files the annual declaration within seven months of the end of the first financial year.

The FTA news release adds three details.

• The waiver covers the first tax period only.
• It applies whether you registered late and were fined, or have not registered yet. In the second case you register first, then file within the seven months.
• If you already paid the AED 10,000, the amount is credited back to your account with the FTA once you meet the condition.

The waiver is the main way to cut UAE corporate tax penalties after a missed registration, and the seven-month rule is the trap. A first tax period ending on 31 December 2025 gives a waiver deadline of 31 July 2026, not the 30 September 2026 return deadline. File in August and the waiver is gone, even though the return is on time. I did not find an end date for the initiative on the FTA pages, but confirm it is still in force before you rely on it.

Late Return and Late Payment

The General Corporate Tax Guide says the return and the payment are both due within nine months of the end of the tax period. The FTA guide states it twice. For a 31 December year end, that means 30 September of the next year.

The late return penalty in item 7 runs month by month. It is imposed from the day after the deadline, and then on the same date each month. Each month or part of a month counts. A return filed one day late therefore costs a full AED 500. From the thirteenth month the monthly amount doubles to AED 1,000.

The table ties this penalty to failing to submit the return. It does not mention the tax amount. My reading is that a company with zero tax due can still be fined. The 0% band covers taxable income up to AED 375,000 according to the FTA guide, but the return must still be filed.

Unpaid tax is a separate penalty under item 8. It is 14% per annum, applied monthly from the day after the due date. As a rough illustration, AED 10,000 of tax left unpaid for twelve months would attract about AED 1,400 on a simple basis. The FTA applies the rate monthly, so use the figure shown in EmaraTax for the real amount. Article 3 of Decision 40 of 2017 is also worth remembering: a penalty never replaces the tax itself.

If you correct an error later, item 10 charges 1% a month on the tax difference until the voluntary disclosure is filed. If the FTA tells you it will audit before you disclose, item 11 adds a fixed 15% on the tax difference plus the monthly 1%. An incorrect return costs AED 500 unless you correct it before the filing deadline.

Record-Keeping and Other Penalties

Record-keeping is the quiet source of UAE corporate tax penalties. Item 1 charges AED 10,000 for each failure to keep the required records, and AED 20,000 for a repeat within 24 months of the last violation. The FTA guide says taxable persons and exempt persons keep records for seven years after the end of the tax period.

Four smaller items follow the same pattern: a late filing becomes a monthly bill, and a paperwork gap becomes a fixed fine.

• Arabic documents. AED 5,000 if you do not supply tax records in Arabic when the FTA asks.
• Changes to your tax record. AED 1,000 for the first failure to inform the FTA of a change, then AED 5,000 for a repeat within 24 months.
• Legal representative. AED 1,000 for failing to notify an appointment on time. The legal representative pays late return penalties from their own funds.
• Deregistration. AED 1,000 a month, capped at AED 10,000, if you close the company and deregister late. See our guide to closing a company in the UAE.

A Worked Example for a Small Foreign-Owned Company

The figures below show UAE corporate tax penalties in an illustrative case. I use the penalty amounts from Cabinet Decision 75 of 2023 and invented company facts. Assume a small consultancy, owned by a foreign founder, with taxable income inside the 0% band, so no corporate tax is due. Its first tax period is 1 January to 31 December 2025, and it registered late.

The company owes no tax in any row, yet the bill ranges from nothing to AED 18,000. The only thing that changes is the filing date. If the company also cannot produce its records on request, add AED 10,000 per violation. A founder who files by 31 July 2026 pays nothing.

Five Mistakes That Trigger UAE Corporate Tax Penalties

1. Assuming zero tax means no filing. The filing penalties do not depend on the tax due.
2. Missing the seven-month waiver date. Filing at month eight loses the waiver, even though month nine is the legal deadline.
3. Treating the first period as normal. The waiver covers the first tax period only, so later years get no such relief.
4. Leaving records with an outsourced accountant. The duty to keep seven years of records stays with the company.
5. Not telling the FTA about changes. A new address, a new owner or a change in the legal representative must reach the FTA, or the AED 1,000 and AED 5,000 penalties apply.

If You Are Already Late

To limit UAE corporate tax penalties, act in this order. Each step lowers the monthly bill.

1. Register in EmaraTax now if you have not. The AED 10,000 is fixed, but further delay adds nothing to that one.
2. Check the first tax period end date and count seven months. If you are inside the window, file to claim the waiver.
3. File the return even if the figures are not perfect. Each additional month adds AED 500, or AED 1,000 after month twelve. An error can be corrected later by voluntary disclosure, which costs 1% a month on the tax difference.
4. Pay any tax due at once. The 14% per annum penalty runs on unpaid tax.
5. If a penalty looks wrong, object. Article 5 of Decision 40 of 2017 refers you to the Tax Procedures Law procedure.

Where the Sources Stop

This article reflects the texts as I opened them on 16 October 2026. I read the consolidated Decision 75 and Decision 40 PDFs, the FTA waiver pages and the General Corporate Tax Guide. I did not find the number of the Cabinet Decision that created the waiver, because the FTA pages describe it only as a Cabinet Decision. The sources also do not say how the 14% per annum is converted to a monthly figure. Check EmaraTax for the amount actually charged.

This is general information, not legal or tax advice. Confirm your position with the FTA or a licensed UAE tax adviser.

FAQ

What is the penalty for late corporate tax registration in the UAE?

It is AED 10,000, imposed when a taxable person does not submit a registration application within the timeline set by the Federal Tax Authority. The penalty was added to the schedule of Cabinet Decision 75 of 2023 by Cabinet Decision 10 of 2024, effective 1 March 2024. A waiver can remove it in some cases.

What is the penalty for filing a corporate tax return late?

Under Cabinet Decision 75 of 2023 it is AED 500 for each month, or part of a month, for the first twelve months, then AED 1,000 for each month, or part of a month, from the thirteenth month. The first penalty falls on the day after the deadline, and the same date each month after that.

How does the FTA penalty waiver work?

The FTA waives the AED 10,000 late registration penalty if the taxpayer files the first return, or the annual declaration for an exempt person, within seven months of the end of the first tax period instead of the usual nine. It applies to the first period only. A penalty already paid is credited back to the taxpayer’s account.

Do UAE corporate tax penalties apply if my company owes no tax?

Possibly yes. The late return and late registration penalties in Cabinet Decision 75 of 2023 are tied to missing the filing or registration deadline, not to the amount of tax due. A company with taxable income inside the 0% band can still be fined for a late return, so zero tax does not mean zero penalty.

How long must I keep records to avoid record-keeping penalties?

The FTA’s General Corporate Tax Guide says taxable persons and exempt persons must keep records and documents for seven years after the end of the tax period they relate to. Failing to keep the required records carries AED 10,000 per violation, and AED 20,000 for a repeat within 24 months.

Can I object to a corporate tax penalty?

Yes. Article 5 of Cabinet Decision 40 of 2017 says a person may object to administrative penalties under the procedures of Federal Decree-Law 28 of 2022 on Tax Procedures. Paying a penalty does not remove the duty to pay the tax itself, because Article 3 keeps the two separate. Ask an adviser before the objection window closes.

Your Next Step

To keep UAE corporate tax penalties at zero, start with two dates: the end of your first tax period and the date you registered. If either one has passed its deadline, the waiver window may still be open. If you run a foreign-owned company and want a second pair of eyes on your filing position, see our services or contact us.