The late corporate tax return penalty UAE businesses face, and the rest of the table

If the return is not filed by the deadline, nine months after the end of the tax period, the penalty is AED 500 for each month or part of a month for the first twelve months. From the thirteenth month it rises to AED 1,000 for each month or part of a month.

Example: a Fujairah trading company files its 31 December 2025 return on 5 January 2027, three months and a few days after the 30 September 2026 deadline. That is four months or part months, so the late filing penalty is AED 2,000.

Tax not paid by the deadline attracts a monthly penalty at a rate of 14% per annum on the unpaid amount, for each month or part month, starting the day after the due date. In practice that is roughly 1.17% of the unpaid tax each month.

Continuing the example, the company owed AED 48,000 and paid it with the late return. Four months at about 1.17% gives roughly AED 2,240. Together with the filing penalty, lateness cost about AED 4,240, close to 9% of the tax itself.

Failing to apply for registration within the FTA's timeframe carries a penalty of AED 10,000. The FTA has offered a waiver where the first return is filed within seven months of the end of the first tax period; check current FTA guidance before relying on it.

Failing to apply for deregistration on time costs AED 1,000, repeated on the same date each month, up to a maximum of AED 10,000. Failing to tell the FTA about changes that affect your tax record costs AED 1,000 for the first violation and AED 5,000 for a repeat within 24 months.

Not keeping the required records and information costs AED 10,000 for each violation, rising to AED 20,000 for a repeat within 24 months. That is the single most expensive item for a small business, and it is entirely within your control.

Submitting an incorrect return carries a AED 500 penalty, unless you correct it before the filing deadline. If you correct it by voluntary disclosure later, a 1% monthly penalty applies to the tax difference from the original due date. If the FTA finds the error first through an audit, there is a fixed 15% penalty on the difference, plus the 1% monthly penalty.

Every penalty above comes from one of three failures: missing a date, losing a document, or getting a number wrong. A calendar fixes the first. A document-per-transaction habit fixes the second. A reviewed computation fixes the third.

• Put the nine-month deadline in the calendar on the first day of the tax year
• Attach a document to every ledger entry when it is posted
• Close each month within a few weeks, not once a year
• Have a second person review the computation before filing
• If you spot an error before the deadline, correct the return at once

HelloBooks addresses the records penalty most directly. The AI agent attaches the source bill, receipt or invoice to each entry it posts, reading Arabic and English documents, and lists any transaction without one. The audit log on the Business plan records who changed what and when, which helps if you ever have to explain an amendment.

It also keeps the deadlines visible: ask 'when is my corporate tax return due?' and it answers from your tax period settings. Filing and payment stay with you or your accountant on EmaraTax. Firms that want reminder rules tailored to each client's year end can set them up with us via /book-a-demo.