FTA has introduced revised administrative penalties under Cabinet Decision No. (129) of 2025, effective 14 April 2026, lowering several fines and updating compliance rules across VAT, excise tax and corporate tax.
The UAE Federal Tax Authority (FTA) has implemented updated administrative penalty provisions under Cabinet Decision No. (129) of 2025, amending parts of Cabinet Decision No. (40) of 2017. The changes, effective 14 April 2026, reduce several fines and revise penalty structures to support compliance and simplify tax procedures.
Key reductions include a cut in the penalty for failing to submit Arabic-language tax records upon request from AED 20,000 to AED 5,000. The penalty for failing to update tax registration details is set at AED 1,000 per violation, rising to AED 5,000 for repeat offences within 24 months, compared with the previous range of AED 5,000 to AED 10,000.
The penalty for a legal representative failing to notify their appointment has also been reduced from AED 10,000 to AED 1,000, payable from the representative’s own funds.
Penalty table (CT/TP/VAT) from 14 April 2026
| Violation | Previous Penalty | New Penalty |
| Late payment of tax | 2% after due date + 4% monthly (max 300%) | 14% per annum, calculated monthly |
| Incorrect tax return | AED 1,000 (first), AED 2,000 (repeat) | AED 500 unless corrected before deadline or no tax difference after voluntary disclosure |
| Voluntary disclosure submitted | 5–40% (bracket-based system) | 1% per month on tax difference |
| Failure to submit VD before audit notice | 50% fixed + 4% monthly | 15% fixed + 1% monthly |
FTA Director Abdulaziz Mohammed Al Mulla said, “The new amendment, which includes reductions in a number of administrative penalties imposed for violations of tax laws, comes within the framework of the wise leadership’s directives to implement the tax system in accordance with international best practices, in order to preserve the strong and sustained growth of the national economy and enhance transparency through establishing an ideal tax legislative environment characterised by flexibility and responsiveness to change, supported by continuous review and the sustainable development of tax legislation in line with evolving requirements.”
“We call on tax registrants, where violations of tax legislation exist, to benefit from the significant advantages provided by the decision, which introduces further facilitations aimed at reducing the tax burden on business sectors, thereby enabling them to strengthen their pivotal role in reinforcing the UAE’s leading position as a global financial and economic centre,” he added.
The FTA said the amendments cover penalties related to late tax payment, incorrect tax returns, voluntary disclosures, and other obligations under the Federal Decree-Law on Tax Procedures, the Federal Decree-Law on Excise Tax, and the Federal Decree-Law on Value Added Tax.
