VAT
Corporate Tax
Accounting & CFO
What is a late filing actually costing you?
Most people underestimate this, because the fixed fine is the small part. The part that grows is the charge on unpaid tax, and it runs from the day after the deadline whether or not anyone has contacted you.
AED 1,000
Based on a late filing on VAT, with no tax outstanding.
The figures behind the number
Fixed, for both VAT and corporate tax. It does not grow with time, which is the only merciful thing about it.
Charged the day the return is late, rising to AED 2,000 if another return was late within the previous 24 months.
Applied monthly, or for part of a month, on whatever tax is still unpaid. This is the one that turns a small problem into a large one.
The corporate tax late filing penalty works differently from VAT: rather than a single fixed amount, it is AED 500 for each month or part month during the first twelve, then AED 1,000 a month from the thirteenth onwards. A return left outstanding for two years reaches AED 18,000 on the filing penalty alone, before anything charged on the tax itself.
Three things people get wrong
- Filing on time is not the same as paying on time. Submitting the return and then paying a fortnight later still triggers the 14%. Both fall on the same date and both have to be met.
- A nil return is still a return. A quarter with no sales does not excuse you from filing, and the AED 1,000 lands whether the return shows AED 400,000 of output tax or nothing at all.
- Waiting to be contacted makes it worse. The charge accrues from the day after the due date regardless of whether anyone has written to you, so the gap between the deadline and the letter is not free time.
What can be done once it has happened
The first thing is to stop the meter. The charge on unpaid tax runs until the tax is paid, so settling the principal — even before the penalty position is resolved — caps the part that grows. Outstanding returns should be filed even if they are months late, for the same reason.
Beyond that there are formal routes: a reconsideration request where you believe a penalty was wrongly applied, a voluntary disclosure where the problem is an error in a return you already filed, and in defined circumstances applications to pay in instalments or to have a penalty reduced. Which of these fits depends on the facts and on timing, and several carry deadlines of their own. It is worth getting the sequence right first time.
Common questions
Does the 14% compound?
It is applied monthly, or for part of a month, on the unsettled tax. The estimate above treats it as a simple monthly charge on the principal, which is the conservative reading. The assessment in your EmaraTax account is the figure that actually counts, and we would always check against that rather than a calculator.
I have several late returns. Does the penalty multiply?
Yes. The fixed penalties apply per return, so four late VAT returns is four separate charges — and after the first, the repeat rate applies. The calculator above prices a single return. If you have a backlog, the honest answer is that your number is larger than this page will show you.
Can penalties be waived entirely?
Sometimes, in defined circumstances, through the formal channels rather than by asking nicely. Nobody can promise you a waiver in advance, and anyone who does should worry you. What is reliably within your control is stopping the charge and getting the filings current.
Will registering now trigger a penalty for the past?
If you were required to register earlier and did not, the AED 10,000 applies and the Authority may backdate your registration — which means the supplies you made in the meantime were taxable supplies. Coming forward is still generally better than being found, but it is a conversation to have with your accountant before you file anything.
Tell us what is outstanding and we will give you the real number
Send us your TRN and which periods are late on WhatsApp. We will pull the actual position from EmaraTax rather than estimating it, get the outstanding returns filed, and set out your options on the penalties before anything further accrues.
Penalty amounts on this page come from Cabinet Decision No. 40 of 2017 on administrative penalties for tax law violations and its amendments, including Cabinet Decision No. 129 of 2025 effective 14 April 2026, and from Cabinet Decision No. 75 of 2023 on administrative penalties relating to the Corporate Tax Law and its amendments. This tool produces an estimate from the figures you enter. It is not tax advice, it does not account for every penalty that may apply to your situation, and only the Federal Tax Authority can determine what you owe. OwnYourCFO is an independent firm of accountants and is not affiliated with or acting on behalf of the Federal Tax Authority.
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OwnYourCFO is an independent firm of accountants licensed in Ajman Free Zone, United Arab Emirates, serving clients in Dubai, Abu Dhabi and across the UAE. We are not affiliated with, endorsed by, or acting on behalf of the Federal Tax Authority or any government body. Businesses are free to deal with the Federal Tax Authority directly themselves. Our fees are for professional services only and are separate from any government charge.