VAT Fines and Penalties in UAE

Complete list of VAT Fines and Penalties in UAE

VAT Fines & Penalties in UAE

Federal Tax Authority (FTA) has approved the complete and final list of all the administrative VAT Fines and Penalties in UAE that will be imposed on businesses for violations of the VAT laws.

Every VAT fine or penalty will be no less than AED 500.

The complete and approved list of the administrative VAT fines and penalties in UAE for breaching the law related to VAT and excise tax are as follows:

Violations related to tax procedures

1. Failure to keep the required records specified by the tax procedures law and the tax law.

AED 10,000 for the first time.

AED 50,000 for each repeat violation.

2. Failure to submit the required records in Arabic when requested by the Authority.

AED 20,000

3. Failure to submit a registration application within the timeframe specified by the tax law.

AED 20,000

4. Failure to submit a deregistration application within the timeframe specified by the tax law.

AED 10,000

5. Failure to inform the Authority of an amendment to tax records that needs to be submitted.

AED 5,000 for the first time.

AED 15,000 in case of repetition.

6. Failure to notify the authority that a legal representative has been appointed for the business within the specified timeframe. The penalties will be charged to the legal representative.

AED 20,000

7. Failure of the legal representative to file a tax return within the specified timeframe. The penalties will be charged to the legal representative.

AED 1,000 for the first time.


AED2,000 in case of repetition within 24 months.

8. Failure of the Registrant to submit a tax return within the time frame specified by the tax law.

AED 1,000 for the first time.

AED 2,000 in case of repetition within 24 months.

9. Failure to pay the tax stated in the tax return/tax assessment form within the time frame specified by the tax law. The taxable person will incur a late payment penalty as follows:

  • 2% of the unpaid tax is due immediately.
  • 4% is due on the seventh day following the deadline for payment.
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.

10. Submission of incorrect tax returns.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time.
  2. (AED 5,000) in case of repetition
  • Percentage-based penalty shall be applied on the amount unpaid to the Authority due to the error as follows:
  1. (50%) if the Registrant does not make a voluntary disclosure or he made the voluntary disclosure after being notified of the tax audit and the Authority has started the tax audit process, or after being asked for information relating to the tax audit, whichever takes place first.
  2. (30%) if the Registrant makes a voluntary disclosure after being notified of the tax audit and before the Authority starts the tax audit.
  3. (5%) if the Registrant makes a voluntary disclosure before being notified of the tax audit by the Authority.

11. Voluntary disclosure by a business of errors in a tax return, tax assessment, or refund application.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time.
  2. (AED 5,000) in case of repetition
  • Percentage-based penalty shall be applied on the amount unpaid to the Authority due to the error as follows:
  1. (50%) if the Person/Taxpayer makes the disclosure after either of the following conditions applies: a) they have been notified of the tax audit and the Authority has started the audit process, or b) they have been asked for information relating to the tax audit.”
  2. (30%) if the Person/Taxpayer makes a voluntary disclosure after being notified of the tax audit but before the start of the tax audit.
  3. (5%) if the Person/Taxpayer makes a voluntary disclosure before being notified of the tax audit by the Authority.

12. Failure of a business to voluntarily disclose errors in a tax return, tax assessment, or refund application before a tax audit.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time
  2. (AED 5,000) in case of repetition
  • 50% of the amount unpaid to the Authority due to the error.

13. Failure of a person or business to facilitate the work of the tax auditor.

AED 20,000

14. Failure of the Registrant to calculate tax on behalf of another person as required under the tax law.

The Registrant shall incur a late payment penalty as follows:

  • 2% of the unpaid tax is due immediately once the payment is late.
  • 4% of the amount of tax which is still unpaid is due on the seventh day following the deadline for payment.
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.

15. Failure to account for tax due on import of goods as required under the tax law.
50% of unpaid or undeclared tax.

Penalties and Fines Related to VAT

Failure by the taxable person/business to display prices inclusive of tax.

AED 15,000

Failure by the taxable person/business to notify the Authority of applying tax based on the margin.

AED 2,500

Failure to comply with conditions and procedures related to the transfer of goods in designated zones.

The penalty will be the higher of AED 50,000 or 50% of the tax, if any, unpaid on the goods as the result of the violation.

Failure by the taxable person/business to issue a tax invoice or alternative document when making any supply.

AED 5,000 for each missing tax invoice or alternative document.

Failure by the taxable person/business to issue a tax credit note or alternative document.
AED5,000 for each missing tax credit note or alternative document.

Failure by the taxable person to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes.

AED 5,000 for each incorrect document.

VAT Voluntary Disclosure Form by FTA – Form 211

A voluntary disclosure is a form provided by Federal Tax Authority (FTA) to allow businesses and taxpayers to notify FTA about the errors/mistakes and omission/changes in a Tax return or Tax Refund. Voluntary disclosure form 211 in UAE helps a taxable person to make correction in the errors they have committed while submitting a VAT Return or applying for the VAT Refund. It gives a choice to the taxable person or business to voluntarily disclose the mistakes they have done in the previous VAT Return or VAT Refund.

SAB Auditing of Accounts is a certified Tax Agent in UAE. Our Tax Experts have handled and controlled a lot of situations and provided the best suitable solutions to the companies to corroborate that businesses will constantly operate in a smooth and best possible way. To be a certified tax agency in the country, which means that the firm met the high standards of the government to become a tax agent in UAE.

SAB will help your business to grow by avoiding any fines and penalties through providing the following services:

Tax Agent in UAE - Tax Agent Dubai - FTA Tax agent

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