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VAT Fines & Penalties

VAT Return Fines & Penalities

Federal Tax Authority (FTA) of United Arab Emirates has listed below penalties in case of delay in filing VAT Return and delay in payment of tax liability:
  • VAT Returns must be submitted within the specified deadline, otherwise a penalty of AED 1,000 will be imposed for the first time of occurrence of a delay. In case of repetitive non-compliance within 24 months, the penalty will be increased to AED 2,000 for each offence.
  • If you do not submit a VAT Return by the specified due date, the FTA may issue a tax assessment to you with an estimate of the payable tax. In such a case, you may be required to pay any payable tax assessed, penalty on non-submission of tax return and/or late payment penalty upon the issuance of the tax assessment (as applicable).
  • Following the submission of a VAT Return, the reported Payable Tax must be settled within the deadline. Failure in the payment before the due date would result in a late payment penalty consisting of:
    • (2%) of the unpaid tax immediately levied once the payment of Payable Tax is late
    • (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid
    • (1%) daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%)