UAE Tax Penalties 2026: Revised Fines Under VAT, Excise & Tax Procedures Law

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Last updated at

November 11, 2025

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Updated UAE Tax Penalties 2026: VAT, Excise & Tax Procedures Law Explained

The UAE has issued administrative penalties for violations of tax laws through Cabinet Decision No. 129 of 2025, which was announced on 9 October 2025 and will take effect on 14 April 2026.

This blog will explain all the revised penalties under the Tax Procedures Law, Excise Tax Law, and Value Added Tax (VAT) Law.

Penalties under the Tax Procedures Law

The below table lists penalties under the Tax Procedures Law:

No.	Violation	Penalty (AED)	Notes
1	Failure to keep required records and other information as specified under tax laws	1,000 for each violation or 20,000 in case of repetition within 24 months	Applies to both physical and electronic records
2	Failure to provide data, records, or documents in Arabic when requested by the FTA	5,000
3	Failure to submit a tax registration application within the legal timeframe	10,000
4	Failure to submit a tax deregistration application on time	1,000 for each month of delay up to a maximum of 10,000	Penalty repeats monthly until deregistration is completed
5	Failure to inform the FTA of any change in information related to the taxpayer’s record	1,000 for first violation or 5,000 in case of repetition within 24 months	Includes changes in trade license, address, or ownership
6	Failure of the legal representative to notify the FTA about their appointment	1,000	Payable from the representative’s own funds
7	Failure of the legal representative to file a tax return within the deadline	1,000 for first violation or 2,000 in case of repetition within 24 months	Liability remains with the representative personally
8	Failure of the registrant to submit a tax return within the specified timeframe	1,000 for the first time or 2,000 in case of repetition within 24 months
9	Failure to pay the payable tax within the legal timeframe	Monthly penalty of 14% per annum for each month or part thereof	Calculated from the day after the due date until full payment
10	Submitting an incorrect tax return	500	Waived if corrected before submission deadline or through voluntary disclosure without tax difference
11	Submitting a voluntary disclosure with delay	Monthly penalty of 1% on the tax difference for each month or part thereof	Applied from the day after the due date until disclosure is submitted
12	Failure to submit a voluntary disclosure before receiving FTA audit notice	Fixed penalty of 15% on the tax difference plus 1% monthly	Encourages correction before FTA audit notification
13	Failure to cooperate or facilitate during a tax audit	20,000	Applies to the person, legal representative, or tax agent
14	Failure to calculate tax on behalf of another person when required by law	Monthly penalty of 14% per annum on unsettled tax amount	Same calculation method as unpaid tax penalty
15	Failure to calculate tax due on import of goods	50% of the unpaid or undeclared tax

Penalties under the Excise Tax Law

The below table lists penalties under the Excise Tax Law:

No.	Violation	Penalty (AED)	Notes
1	Failure to display prices inclusive of tax	5,000	Applies to all taxable Excise Goods sold in the UAE
2	Failure to comply with the conditions and procedures for transferring Excise Goods between Designated Zones or storing and processing such goods	Higher of 50,000 or 50% of the tax chargeable on the goods	The higher value will apply
3	Failure to provide the FTA with the price lists of Excise Goods produced, imported, or sold	5,000 for the first time or 10,000 in case of repetition

Penalties under the VAT Law

The table below lists the penalties under the VAT Law:

No.	Violation	Penalty (AED)	Notes
1	Failure to display prices inclusive of tax	5,000	Applies to all goods and services offered to consumers
2	Failure to notify the FTA when applying the tax based on the margin scheme	2,500
3	Failure to comply with conditions or procedures for keeping goods in a Designated Zone or transferring them to another Designated Zone	Higher of 50,000 or 50% of the tax chargeable on the goods	The higher value will apply
4	Failure to issue a tax invoice or an alternative document within the specified period	2,500 for each detected case	Applies to all taxable supplies
5	Failure to issue a tax credit note or an alternative document within the specified period	2,500 for each detected case
6	Failure to comply with the conditions and procedures for issuing tax invoices and tax credit notes electronically	2,500 for each detected case	Relates to e-invoicing compliance requirements

How Businesses Can Avoid Tax Penalties in the UAE

To avoid penalties, every UAE business should follow these key practices:

Register and file on time: Register for tax once your business meets the eligibility threshold and file returns with timely tax payments to stay compliant.
Keep proper records and invoices: Maintain all required tax records and documents in both digital and physical form, and be ready to provide them in Arabic if requested by the Federal Tax Authority.
Use an FTA-approved e-invoicing solution: Choose an FTA-approved e-invoicing solution provider like Flick Network to issue compliant invoices and report data directly to the FTA.
Review and correct errors early: If you identify a mistake in your tax filing or refund claim, submit a Voluntary Disclosure immediately to fix it before an audit notice.
Follow Excise and Designated Zone rules: If your business deals with Excise Goods or operates within Designated Zones, follow all FTA rules for pricing, storage, and movement of goods.

Conclusion

Penalties for tax violations in the UAE will range from AED 500 for minor filing errors to AED 50,000 or 50% of the tax value for serious offences. To avoid these penalties, businesses should keep accurate records, file returns on time, and use an FTA-approved e-invoicing solution like Flick Network to issue e-invoices and report data directly to the FTA.

If you have any queries, please email sales@flick.network or call +971 56 977 5833.

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