18 July 2026 · Penalty
The AED 1,000/Month Late Penalty
If you miss the 3-month corporate-tax deregistration deadline, a penalty of AED 1,000 accrues for every month, or part of a month, the application remains outstanding, up to a maximum cap of AED 10,000. The penalty sits within the unified administrative-penalty regime for tax violations under Cabinet Decision No. 129 of 2025, which took effect on 14 April 2026 and carries forward the same AED 1,000-per-month structure the FTA had applied since Cabinet Decision No. 75 of 2023. It is charged in addition to, not instead of, any unpaid corporate tax or other outstanding penalties on the account. Because the fine builds automatically once the deadline passes, often while the owner believes the company is already 'closed' after cancelling the trade licence, the only real defence is diarising the three-month window and filing the deregistration promptly once a trigger event occurs.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
A monthly build-up
The fine grows until you file, charged for each month or part-month the deregistration application remains outstanding past the three-month deadline. It is applied automatically by the FTA's system rather than through a separate assessment, so there is no grace period once the window closes.
- AED 1,000 per month from the missed deadline.
- Capped at AED 10,000 after roughly ten months.
- Applied automatically once the window closes.
- Separate from, and additional to, any unpaid tax.
- Keeps accruing until the application is finally submitted.
Simple to prevent
Timely filing removes the risk entirely, because the penalty only exists for the gap between the three-month deadline and the date the application is actually submitted. Businesses that diarise the deadline the moment a closure decision is made rarely encounter it.
- Diarise the three-month window from day one.
- File the final return early, not at the last minute.
- Clear balances before applying, so approval is not delayed.
- Submit the deregistration application promptly.
- Do not assume licence cancellation covers the tax side.
What months of delay actually cost
Consider a Dubai trading company that stops operating and has its licence cancelled soon after. The corporate-tax deregistration application is due three months from cessation. If the owner assumes the cancelled licence closed everything and only discovers the FTA obligation months later, the penalty has already been accruing at AED 1,000 per month since the deadline passed: roughly AED 4,000 after three overdue months, AED 6,000 after five, and the full AED 10,000 cap once the application is around ten months late.
- Deadline missed: penalty starts the following month.
- Three months overdue: about AED 4,000 accrued.
- Five months overdue: about AED 6,000 accrued.
- Roughly ten months overdue: the AED 10,000 cap is reached.
Where the penalty comes from
The AED 1,000-per-month late-deregistration penalty, capped at AED 10,000, was originally set by Cabinet Decision No. 75 of 2023 and has been carried into the unified administrative-penalty regime under Cabinet Decision No. 129 of 2025, effective 14 April 2026. It applies on top of the substantive deregistration obligation created by Article 52 of Federal Decree-Law No. 47 of 2022, and it is charged independently of any interest or penalties already owed on unpaid corporate tax.
- Set by Cabinet Decision No. 75 of 2023.
- Carried into Cabinet Decision No. 129 of 2025.
- Sits alongside the Article 52 deregistration duty.
- Independent of penalties on unpaid tax itself.
Disputing a penalty already charged
A business that believes a late-deregistration penalty was applied incorrectly is not without options, but the process runs on its own strict clock, much like the deregistration deadline itself. Under the UAE's tax procedures framework, a taxable person can submit a reconsideration request to the FTA, and if still unsatisfied, escalate the matter to the Tax Disputes Resolution Committee — but both stages have their own tight filing windows, so a dispute has to be raised quickly rather than left until the underlying deregistration is finally sorted out.
- A reconsideration request can be submitted to the FTA disputing the assessed penalty.
- Requests are time-limited, so gather your evidence and file promptly rather than waiting.
- An unsuccessful reconsideration can be escalated to the Tax Disputes Resolution Committee.
- Disputing a penalty does not pause the underlying obligation to deregister and clear the account.
- Exiloz reviews whether a dispute is realistically worth pursuing before recommending it, since prevention is almost always cheaper than contesting a penalty after the fact.
Related guides
Frequently Asked Questions
For understanding, and avoiding, the late-deregistration fine.
How much is the late deregistration penalty?
AED 1,000 for each month, or part of a month, that the deregistration application is overdue past the three-month deadline, up to a maximum of AED 10,000.
Is it on top of unpaid tax?
Yes. It is separate from, and charged in addition to, any outstanding corporate tax and any other administrative penalties already on the account. Clearing the tax owed does not remove the late-deregistration penalty.
Can the penalty be waived?
Penalty relief depends on the FTA's own rules and any voluntary-disclosure or reconsideration process available at the time; the reliably safe route is to deregister within the three-month window so the penalty never starts.
How is the AED 10,000 cap reached?
At AED 1,000 per month, the cap is reached once the application is roughly ten months overdue. After that point the penalty stops growing, but the underlying obligation to deregister, and any unpaid tax, remains.
Does the penalty apply even if the company has no income?
Yes. The penalty is tied to missing the deregistration deadline, not to the company's trading results, so a dormant or loss-making company that misses the window is charged the same way as a profitable one.
What law does this penalty sit under?
It was set by Cabinet Decision No. 75 of 2023 and carried into the unified tax-penalty regime under Cabinet Decision No. 129 of 2025, effective 14 April 2026, alongside the Article 52 deregistration obligation itself.
Can Exiloz help me avoid it?
Yes. We fix your trigger date, prepare the final return, clear outstanding balances, and file the EmaraTax deregistration inside the three-month window so the AED 1,000/month penalty never has a chance to start.
If I already owe the AED 10,000 cap, is there any reason to still deregister quickly?
Yes. Once the cap is reached the late-deregistration penalty stops growing, but the underlying obligation to file the final return, clear all balances and close the registration has not gone away — and interest or further scrutiny on an account left open indefinitely is a separate risk. Reaching the cap is a reason to act immediately, not a reason to deprioritise the filing.
Avoid the late fine
Exiloz deregisters your company on time, final return, cleared balances, and the EmaraTax application inside the three-month window, so the AED 1,000/month penalty never starts.