Administrative Penalties under Corporate Tax Law

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The UAE’s Ministry of Finance has issued Cabinet Decision No. 75 of 2023 on the Administrative Penalties to be imposed on Taxpayers for Violations of UAE Corporate Tax Law.

These administrative penalties will be applied with the concerned violations of the Tax Procedures mentioned the Federal Decree-Law No. (28) of 2022 on Tax procedures and the Federal Decree-Law No. (47) of 2022 on Taxation of Corporate’s and Businesses. The penalties are applicable, notwithstanding the provisions of Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violation of Tax Laws in the UAE.

The obligation to pay the administrative penalties may be on the Taxable Person, Person subject to Tax Audit, Legal Representative(s) or Tax Agent(s) as applicable.

Administrative Violations and Penalties

The administrative penalties linked with the violations have been categorized in a comprehensive table distinguishing the penalties between lump sum and monthly basis.

Sr. No	Description of the Violation	Penalty (In AED)
Administrative Penalties on Lumpsum Basis:
1	Failure to keep the required documents and other information specified in the Corporate Tax Law.	● 10,000 each violation ● 20,000 if repeated within 24 months of previous violation.
2	Failure to submit the required documents, data, and records in Arabic upon authority’s request.	● 5,000
3	Failure to submit an amendment application to the FTA to amend the company records	● 1,000 for each violation ● 5,000 if repeated within 24 months of previous violation
4	Failure to provide notification of appointment of Legal Representative (LR) - Due from LR’s own funds	● 1000
5	Submission of Incorrect Tax Return	● 500* * Not Applicable if Return corrected before submission due date.
6	Failure to offer facilitation of Tax Auditor in violation of provisions of Article 20 of Tax Procedures Law by Person subject to Tax Audit (TP), his Tax Agent (TA) or his Legal Representative (LR) – Due from funds of TP / LR / TA as applicable	● 20000
Administrative Penalties on Monthly Basis:
7	Failure to submit a deregistration application within the specified timeline	● 1000 monthly up to a maximum of 10,000.
8	Failure to file Tax Return within specified timeframes by Legal Representative – Due from LR’s own funds	● 500 for each month or part thereof, for the first 12 months. ● 1000 for each month or part thereof, from 13th month. Penalty imposed from the day of expiry of timeframe & on same date monthly thereafter.
9	Failure to submit Tax Return within specified timeframes by Registrant	● 500 for each month or part thereof, for the first 12 months. ● 1000 for each month or part thereof, from 13th month. Penalty imposed from the day of expiry of timeframe for submission & on same date monthly thereafter.
10	Failure to settle payable Tax by Taxable Person	● Monthly – 14% per annum for each month or part thereof - Penalty imposed from due date of payment & on same date monthly thereafter. Due date in case of Voluntary Disclosure – 20 days from date of submission. Due date in case of Tax Assessment – 20 days from date of receipt.
11	Submission of Voluntary Disclosure for errors in Tax Return / Tax Assessment / Tax Refund	● Monthly – 1% of Tax difference for each month of part thereof From due date of Tax Return/ Submission of Tax Refund application / Notification of Tax Assessment till date of submission of Voluntary Disclosure
12	Failure to submit Voluntary Disclosure (VD) for errors in Tax Return / Tax Assessment / Tax Refund	● Fixed Penalty of 15% of Tax Difference ● Monthly – 1% of Tax difference for each month of part thereof to be applied as: a. Incase VD submitted after notification of Tax Audit – from the day following due date of Tax Return / Submission of Refund Application / Notification of Tax Assessment till the date VD is submitted. b. Failure to submit VD – from date following the due date of Tax Return / Submission of Refund Application / Notification of Tax Assessment till date of issuance of Tax Assessment.
13	Failure to submit or late submission of Declaration to the Authority	● 500 for each month or part thereof, for the first 12 months. ● 1000 for each month or part thereof, from 13th month. ● Penalty imposed from the day of expiry of timeframe for submission & on same date monthly thereafter.