The current table
Administrative penalties for VAT are set by Cabinet Decision No. 40 of 2017. It was amended by Cabinet Decision No. 129 of 2025, which the Federal Tax Authority announced as in force from 14 April 2026, and the consolidated text on the Ministry of Finance website shows the table below. The older structure of percentage penalties for late payment is no longer in the consolidated text, so figures you may have seen in older articles can be out of date.
- Late VAT registration: AED 10,000.
- Late VAT return: AED 1,000 the first time and AED 2,000 if repeated within 24 months.
- Late payment of tax: a monthly penalty of 14 percent per annum, for each month or part of a month, on the unpaid tax from the day after the due date.
- Incorrect return: AED 500, unless corrected within the filing deadline or fixed by a voluntary disclosure that produces no difference in tax.
- Failure to keep records: AED 10,000, rising to AED 20,000 for a repeat within 24 months.
How the late payment figure is worked out
The text sets "a monthly penalty of 14% per annum, for each month or part thereof". This tool reads that as 14 percent divided by 12 for each month or part of a month, applied to the unpaid amount. The wording does not state the arithmetic, so this is an interpretation. Ask the Federal Tax Authority or your adviser for the figure that will be charged, and note that the consolidated text we read states no cap.
What it does not cover
Voluntary disclosure, penalties after an audit notice, tax invoice offences and other items in the table are not included. They have their own percentages and amounts, and the Authority can reduce or waive penalties in some circumstances. Late filing and late payment are separate penalties and can both apply.
How to use the result
Penalties that run by the month grow each month or part of a month, so the cheapest moment to file or pay is today. If you find that a past return was wrong, correcting it through a voluntary disclosure before any audit notice is treated more lightly than being found in an audit. Keep the date of each filing and payment, because the Authority works from those dates. For the full picture, read our guide to FTA VAT penalties.