what is corporate tax penalty in uae?

[shayankhan]

According to the existing corporation tax framework, failure to file corporate tax returns will result in fines and penalties.
On March 1, 2024, the new decision came into force vide Cabinet Decision No. 10 of 2024, which modifies Cabinet Decision No. 75 of 2023's schedule of violations and administrative penalties. The law was released by the Ministry of Finance regarding the taxes of corporations and businesses dealing with the implementation of Federal Decree-Law No. 47 of 2022. It imposes an administrative penalty of AED 10,000 for companies that do not get registration within the stipulated time and delay in filing their corporate tax returns by the Federal Tax Authority's deadline. The fine is meant to incentivize taxpayers to abide by the tax code and timely register for corporation tax. The fine amount for late registration for value-added tax and excise tax is the same.
Read more: corporate tax penalty for late filing

Violations and Penalties for UAE Corporate Tax​

No.	Violation Description	Administrative Fine/Penalty in AED
1	If necessary information and records are not maintained as per the Corporate Tax and Tax Procedures Law, there may be a penalty/fine of AED 10,000 per violation	For each violation AED 10,000 and More than 20,000 AED for multiple violations within a 24-month period
2	Not providing information, records, and paperwork in Arabic as requested by the Authority	AED 5,000
3	Failure to submit the deregistration application by the deadline; a fine of AED1,000 each month, up to AED10,000	AED 1,000 each month, up to AED 10,000
4	Failure to notify the Authority of any case necessitating updating tax records	AED1,000 for each infraction, More than AED 5,000 for multiple infractions over a 24-month period
5	The Legal Representative's failure to announce their appointment	AED 1,000 (from the personal funds of the Legal Representative)
6	The Legal Representative's failure to timely file a tax return,	500 AED for each month throughout the first 12 months and AED 1,000 monthly after 1st year (from the funds of the Legal Representative)
7	Failure to file an income tax return on time	AED 500 for the first 12 months and AED 1,000 for each month after the 13th months
8	Not paying the payable taxes	A 14% annual monthly penalty on the outstanding amount of payable taxes, beginning the day after the payment deadline
9	Filing an inaccurate Tax Return	AED 500, if it isn't amended by the deadline
10	Filing a voluntary disclosure regarding mistakes in a tax return, tax assessment, or application for a refund	A one percent monthly penalty on the tax difference, beginning the day after the applicable tax return, tax refund application, or tax assessment deadline
11	Failure to submit a voluntary disclosure knowingly about an audit	1 percent monthly fine imposition in case of Tax Difference, applicable from the filing of refund application, Tax Return, or from the date of Tax Assessment, an additional fine of 15% may be imposed on the Difference of Tax
12	Not providing the Tax Auditor with facilitation	AED 20,000 (from the money of the Person, Legal Representative, or Tax Agent, as appropriate)
13	Not submitting, or submitting a Declaration	AED 500 after the deadline for each of the first twelve months AED 1,000 for every month starting in the thirteenth month
14	Not submitting the corporate tax registration application by the deadline	AED 10,000

 

[Martin Everson]

I guess it's always important to get professional assistance when operating a UAE company. Don't rely on how you did things before as any sort of guidance going forward in 2024.

 

[drphantom]

Finding one professional accounting service in the UAE is important to stay in line with the new tax regulations.