4 July 2026 · VAT penalties
UAE VAT Penalties List (2026)
The main UAE VAT penalties are: late submission of a return (AED 1,000 first offence, AED 2,000 for a repeat within 24 months), a late-payment penalty that accrues monthly on unpaid tax, and fixed penalties for incorrect returns. The updated regime under Cabinet Decision 129 of 2025 took effect 14 April 2026, so old figures can mislead — always confirm against the FTA schedule.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
The penalties that apply most
These are the everyday VAT penalties Dubai businesses hit.
- Late return submission: AED 1,000, then AED 2,000 for a repeat within 24 months.
- Late payment: a monthly penalty accrues on unpaid tax from the day after the due date.
- Incorrect return: fixed penalties may apply unless corrected in time.
- Failure to keep proper records: separate penalties can apply.
How to avoid them
Most VAT penalties are avoidable with process discipline.
- File every assigned period on time, including nil returns.
- Settle payable VAT by the deadline.
- Correct errors via voluntary disclosure before the FTA finds them.
- Keep clean, retrievable records.
Related guides
Frequently Asked Questions
For businesses managing VAT compliance risk.
What is the penalty for late VAT filing?
AED 1,000 for the first offence and AED 2,000 for a repeat within 24 months, plus a late-payment penalty on any unpaid tax.
Did VAT penalties change in 2026?
Yes. The updated regime under Cabinet Decision 129 of 2025 took effect 14 April 2026, so confirm current figures against the FTA.
How do I fix an error cheaply?
File a voluntary disclosure — self-correcting is far cheaper than a penalty imposed after an FTA audit.
Can Exiloz help reduce penalties?
Yes. We keep filings on time and, where errors exist, correct them through voluntary disclosure to minimise cost.
Stay ahead of VAT penalties
Exiloz keeps your VAT filings on time and corrects errors before they cost you.