How to Challenge an FTA Penalty: Waiver, Instalments, Reconsideration

• 15 October, 2026
• By the Exiloz tax team
• Tax Compliance

Last reviewed 15 October 2026 by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.

A penalty is a decision, and decisions can be challenged

An administrative penalty from the UAE Federal Tax Authority is not always the end of the matter. Its dedicated penalty service handles instalments, waivers and refunds of all administrative penalties. Any FTA decision can also be challenged through reconsideration within 40 business days. Tax penalty review support helps a business choose the right route before those deadlines pass.

Each route has conditions, and instalments require the underlying tax for the period to be settled first. Several fixed penalties were also cut from 14 April 2026, so the date of each penalty matters. This guide covers the four options, the instalment conditions, waivers, reconsideration and old-schedule penalties. The figures come from FTA service pages and Cabinet Decisions checked 26 September 2026.

What are the options when the FTA imposes a penalty?

There are four options: pay in full, request instalments, ask for a waiver or seek reconsideration. Paying in full suits a penalty that is both correct and affordable. Instalments suit a correct but large penalty, while waivers and reconsideration suit penalties that should not stand.

Waivers use a separate FTA penalty waiver service. Reconsideration also covers cases where the FTA got the facts or the law wrong, whatever the size of the penalty. Decide the route for each penalty separately, because one account can hold penalties that deserve different treatment.

Quick Answer

A UAE business facing an FTA penalty can pay, request instalments, seek a waiver or apply for reconsideration. Each penalty can take a different route, depending on its own facts.

Who can pay FTA penalties in instalments?

Businesses whose unsettled administrative penalties total at least AED 50,000. The applicant must owe no tax for the relevant period. The penalties cannot be under dispute before the Tax Dispute Resolution Committee or courts, and signed undertakings are required.

Illustrative Company A has AED 68,000 of penalties and no tax owed, so twelve instalments would be about AED 5,700 each. Company B owes AED 32,000 of penalties and AED 15,000 of tax, so it fails both tests. Company B should pay the tax first, which also stops late-payment penalties growing.

Quick Answer

UAE FTA instalment plans need at least AED 50,000 of unsettled penalties and no tax owed for the period. Penalties under dispute at the Committee or in court are excluded.

How do you request an FTA penalty waiver?

Through the FTA's penalty service, under the controls in Cabinet Decision No. 105 of 2021. The service page refers to those controls but does not list every reason. Each request stands on its documented facts.

Explain what went wrong, why it was outside the business's control and what has been fixed since. Asking for a waiver while the return is unfiled or the tax unpaid tells the FTA the violation continues. Review can take up to 110 business days, by the FTA's estimate, so keep current filings on time meanwhile.

Quick Answer

UAE penalty waivers follow Cabinet Decision No. 105 of 2021 and depend on documented facts. Fix the underlying breach first, because FTA review can take up to 110 business days.

How long do you have to request reconsideration?

You have 40 business days from the date of the FTA decision. The reconsideration service is free, and the FTA may take up to 45 business days to respond to a completed request. That period can also be extended where needed.

Count from the decision date, not from the day someone first noticed it on EmaraTax, since business days exclude weekends and public holidays. Forty of them is roughly eight calendar weeks. The request is decided on what you send, so attach the facts, the legal grounds and the evidence.

Quick Answer

A reconsideration request must reach the UAE Federal Tax Authority within 40 business days of its decision. The FTA may take 45 business days to respond, with possible further extensions.

Can penalties under the old schedule be reduced?

Some fixed penalties fell when Cabinet Decision No. 129 of 2025 took effect on 14 April 2026. Per the FTA, the penalty for not providing Arabic records fell from AED 20,000 to AED 5,000. A legal representative's failure to notify an appointment fell from AED 10,000 to AED 1,000.

Check the date each penalty was imposed, because that decides which schedule applies. Where a paid penalty is later reduced or cancelled, request the refund through the same FTA service. Our guide to the 2026 penalty regime lists the other changes.

Quick Answer

Cabinet Decision No. 129 of 2025 reduced several fixed UAE tax penalties from 14 April 2026. Refunds of reduced or cancelled penalties are requested through the same FTA penalty service.

Frequently Asked Questions

Main Takeaways

UAE tax penalties can be paid, spread into instalments, waived or challenged through reconsideration. Instalments need at least AED 50,000 of unsettled penalties and no tax owed for the period. Reconsideration must be requested within 40 business days of the FTA decision. Fix the underlying breach, such as an unfiled return or unpaid tax, before asking the FTA for relief.

Pick the Route for Each Penalty

An FTA penalty is a decision that can often be managed rather than simply paid. Instalments, waivers and reconsideration each have their conditions, and the tax must usually be settled first. The 40-business-day reconsideration window is the hardest limit, so diary it the day each decision arrives. Penalties imposed before 14 April 2026 may also follow the older, higher schedule.

Download the penalty list from EmaraTax and note every decision date and the schedule that applied. Pay any outstanding tax first, then decide for each penalty whether to pay, spread or challenge it. File any reconsideration request with full evidence well inside the 40 business days. Exiloz can review every penalty on the account and prepare each request on time.

Sources & References