What is the penalty for filing a VAT return late?

Article 8 – Publication This Decision shall be published in the Official Gazette. Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 4 Table No. 1 On Violations and Administrative Penalties related to the Implementation of Tax Procedures Law2 No. Description of Violation Administrative Penalty in AED 1 Failure of the Person conducting Business or who has an obligation under the Tax Procedures Law or the Tax Law to keep the required records and other information specified in the Tax Procedures Law and the Tax Law. One of the following two penalties shall be imposed: 1. 10,000 for each violation. 2. 20,000 in each case of repeated violation within 24 months from the date of the last violation. 2 Failure of the Person conducting 5,000 Business or who has an obligation under the Tax Procedures Law or the Tax Law to submit the data, records, and documents related to tax in Arabic to the Authority when requested. 3 Failure of the Taxable Person to submit a 10,000 registration application within the timeframe specified in the Tax Law. 4 Failure of the Registrant to submit a 1,000 in case of late submission of the deregistration application within the application and on the same date timeframe specified in the Tax Law.3 monthly, up to a maximum of 10,000. 5 Failure of the Registrant to inform the Authority of any case that may require the amendment of the information pertaining to his tax record kept by Authority. One of the following two penalties shall be imposed: 1. 1,000 for each violation. 2. 5,000 in each case of repeated violation within 24 months from the date of the last violation. 2 Table amended as per Cabinet Decision No. 129 of 2025 (effective from 14 April 2026). 3 In accordance with Cabinet Decision No. 49 of 2021, if any penalty is to be imposed on the same date monthly, the date for a month that does not contain a corresponding date shall be considered as the first day of the following month. The penalty for all other months shall be imposed on the date the monthly penalty was first imposed. Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 5 6 Failure of the Legal Representative of the 1,000 Taxable Person to provide Notification of their appointment within the specified timeframes, in which case the Penalties will be due from the Legal Representative’s own funds. 7 Failure of the Legal Representative for 1,000 for the first time. the Taxable Person to file a Tax Return 2,000 in case of repetition within 24 within the specified timeframes, in which months. case the Penalties will be due from the Legal Representative’s own funds. 8 Failure of the Registrant to submit the 1,000 for the first time. Tax Return within the timeframe 2,000 in case of repetition within 24 specified in the Tax Law. months. 9 Failure of the Taxable Person to settle 1. A monthly penalty of (14%) per the Payable Tax within the timeframe annum, for each month or part 4 specified in the Tax Law. thereof, imposed on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter. 2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows: a. 20 business days from the date of submission, in the case of a Voluntary Disclosure. b. 20 business days from the date of receipt, in the case of a Tax Assessment. 4 In accordance with Cabinet Decision No. 49 of 2021, if any penalty is to be imposed on the same date monthly, the date for a month that does not contain a corresponding date shall be considered as the first day of the following month. The penalty for all other months shall be imposed on the date the monthly penalty was first imposed. Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 6 10 The Registrant submits an incorrect Tax 500, unless the Registrant takes one of Return. the following actions: 1. Corrects his Tax Return within the deadline specified for submitting the Tax Return pursuant to the Tax Law. 2. Submits a Voluntary Disclosure to correct the Tax Return without resulting in a difference in the amount of Due Tax. 11 The submission of a Voluntary Disclosure by the Taxable Person or the Taxpayer on errors in the Tax Return, Tax Assessment or tax refund application pursuant to Clauses 1 and 2 of Article 10 of the Tax Procedures Law. A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be applied as of the date following the due date of the Tax Return, or submission of the relevant tax refund application until the date of the Voluntary Disclosure is submitted. 12 Failure of the Taxable Person or the Taxpayer to submit a Voluntary Disclosure in relation to errors in the Tax Return, Tax Assessment, or tax refund application before being notified by the Authority that it will be subject to a Tax Audit. The two following penalties shall be imposed: 1. A fixed penalty of 15% on the Tax Difference. 2. A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be calculated as follows: a. Where the Taxable Person submits a Voluntary Disclosure after being notified that it will be subject to a Tax Audit by the Authority, the penalty shall be imposed for the period from the day following the due date of the Tax Return, or the submission of the relevant tax refund application until the date of submitting the Voluntary Disclosure. b. Where the Taxable Person fails to submit a Voluntary Disclosure, the Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 7 penalty shall be imposed as of the date following the due date of the Tax Return, or the submission of the relevant tax refund application until the date of issuance of the Tax Assessment. 13 Failure of the Person subject to Tax 20,000 Audit, his Tax Agent, or Legal Representative to offer facilitation to the Tax Auditor in violation of the provisions of Article 20 of the Tax Procedures Law, provided that the penalties in this case will be due from the Person’s, his Legal Representative’s, or Tax Agent’s own funds, as applicable. 14 Failure of the Registrant to calculate tax 1. A monthly penalty of 14% per annum, on behalf of another Person where the for each month or part thereof, Registrant Taxable Person is obliged to imposed on the unsettled amount of 5 do so under the Tax Law. Payable Tax, from the day following the due date of payment and on the same date monthly thereafter. 2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows: a. 20 business days from the date of submission, in the case of a Voluntary Disclosure. b. 20 business days from the date of receipt, in the case of a Tax Assessment. 5 In accordance with Cabinet Decision No. 49 of 2021, if any penalty is to be imposed on the same date monthly, the date for a month that does not contain a corresponding date shall be considered as the first day of the following month. The penalty for all other months shall be imposed on the date the monthly penalty was first imposed. Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 8 15 The failure of the Person to calculate any 50% of the unpaid or undeclared Tax. tax that may be due on the import of goods as per the Tax Law. Table No. 2 On Violations and Administrative Penalties related to the Implementation of Federal Decree-Law No. 7 of 2017 on Excise Tax6 No. Description of Violation Administrative Penalty in AED 1 Failure of the Taxable Person to display 5,000 prices inclusive of Tax. 2 Failure to comply with the conditions and procedures of transferring Excise Goods from a Designated Zone to another Designated Zone, and the mechanism of preserving, storing, and processing such Excise Goods. 3 Failure of the Taxable Person to provide 5,000 for the first time. the Authority with the price lists of the 10,000 in case of repetition. Excise Good that it produces, imports or sells. The penalty shall be the higher of 50,000 or 50% of the Tax, if applicable, chargeable on the goods in relation to the violation. Table No. 3 On Violations and Administrative Penalties related to the Implementation of Value Added Tax Law7 No. Description of Violation Administrative Penalty in AED 1 Failure of the Taxable Person to display 5,000 prices inclusive of Tax. 2 Failure of the Taxable Person to notify 2,500 the Authority of applying tax based on 6 Table amended as per Cabinet Decision No. 49 of 2021. 7 Table amended as per Cabinet Decision No. 129 of 2025 (effective from 14 April 2026). Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 9 Margin. 3 Failure to comply with the required conditions and procedures related to keeping the Goods in a Designated Zone or moving them to another Designated Zone. 4 Failure of the Taxable Person to issue a 2,500 for each detected case. Tax Invoice or the alternative document when making any supply within the period legally specified. 5 Failure of the Taxable Person to issue a 2,500 for each detected case. Tax Credit Note or the alternative document within the period legally specified. 6 Failure of the Taxable Person to comply 2,500 for each detected case. with the conditions and procedures regarding the issuance of a Tax Invoice and a Tax Credit Note electronically. The penalty shall be the higher of 50,000 or 50% of the Tax, if applicable, chargeable on the goods in relation to the violation. Cabinet Decision No. 40 of 2017 and its amendments – As published by the Ministry of Finance 10

Article 24 – Administrative Penalties Assessment10 1. The Authority shall issue an Administrative Penalties Assessment for the Person and notify him of the Administrative Penalties Assessment within (5) five Business Days for any of the following violations: a. The Person conducting Business or having an obligation under this Decree-Law or the Tax Law failing to keep the required records and other information specified in this Decree-Law and the Tax Law. b. The Person conducting Business or having an obligation under this Decree-Law or the Tax Law failing to submit the data, records and documents related to Tax in Arabic to the Authority when requested. c. The Taxable Person failing to submit a Tax Registration application within the timeframe specified in the Tax Law. d. The Registrant failing to submit a deregistration application within the timeframe specified in the Tax Law. e. The Registrant failing to inform the Authority of any case that requires the amendment of the information pertaining to his Tax record kept by the Authority. f. The Legal Representative failing to inform the Authority of his appointment within the specified timeframe, in which case the penalties will be due from the Legal Representative’s own funds. g. The Legal Representative failing to file a Tax Return within the specified timeframe, in which case the penalties will be due from the Legal 10 Article Amended as per Federal Decree-Law No. 17 of 2024. Federal Decree-Law No. 28 of 2022 and its amendments – As published by the Ministry of Finance 14 Representative’s own funds. h. The Registrant failing to submit the Tax Return within the timeframe specified in the Tax Law. i. The Taxable Person failing to settle the Payable Tax within the timeframe specified in the Tax Law. j. The Registrant submitting an incorrect Tax Return. k. The Taxable Person or the Taxpayer submits a Voluntary Disclosure in relation to errors in the Tax Return or the Tax Assessment or refund application pursuant to Clauses 1 and 2 of Article 10 of this Decree-Law. l. The Taxable Person or the Taxpayer fails to submit a Voluntary Disclosure in relation to errors in the Tax Return or the Tax Assessment or refund application pursuant to Clauses 1 and 2 of Article 10 of this Decree-Law before being notified that he will be subject to a Tax Audit. m. The Person subject to Tax Audit, his Tax Agent or Legal Representative failing to offer facilitation to the Tax Auditor in violation of the provisions of Article 20 of this Decree-Law, in which case the penalties will be due from the Person’s, Tax Agent’s or Legal Representative’s own funds as applicable. n. The Registrant failing to account for Tax on behalf of another Person when the registered Taxable Person is obligated to do so under the Tax Law. o. Any other violation specified under the Tax Law or a Cabinet decision. 2. The Executive Regulation shall specify the information and data that must be included in the Administrative Penalties Assessment. 3. The Cabinet shall issue a decision that specifies the Administrative Penalties for each of the violations listed in Clause 1 of this Article in respect of this Decree-Law, the Tax Law or any other violation specified under a Cabinet decision. 4. The amount of any Administrative Penalty shall not exceed two times the amount of Tax in respect of which the Administrative Penalties Assessment was issued. 5. The imposition of any Administrative Penalty pursuant to the provisions of this Decree-Law or any other law shall not exempt any Person from the responsibility of settling the Payable Tax in accordance with the provisions of this Decree-Law or the Tax Law. Federal Decree-Law No. 28 of 2022 and its amendments – As published by the Ministry of Finance 15 Chapter Five – Penalties, Procedures and Measures