Late filing penalties stack quickly under the UAE tax framework. The schedule is published, the rules are mechanical, and there are some, narrow, paths to penalty relief. Here is what you can do if you have already missed a deadline.
What you'll learn
→ The penalty schedule → Penalty waivers → Reconsideration requests → Avoiding the trapThe penalty schedule
VAT late filing: AED 1,000 for the first offence, AED 2,000 for any subsequent offence within 24 months. Late payment: 2% in the first week, 4% per month thereafter, up to a maximum of 300% of the unpaid tax. Excise tax follows the same schedule.
Corporate tax late filing: a tiered fine based on how late, capped at AED 20,000 for entities below AED 50M of revenue. Above that threshold, the cap is higher. Late payment of CT incurs 14% per annum simple interest plus a one-off 4% on the underpayment.
Penalty waivers
The FTA can waive or refund penalties in cases of force majeure, system failure on their side, or 'reasonable excuse.' Reasonable excuse is a high bar, illness of a director, fire at premises, or a verifiable system outage at the bank handling the payment. Cashflow problems are not reasonable excuse.
The waiver request must be filed within 40 working days of the penalty notice and supported with documentary evidence. Success rates are modest (we see roughly 1 in 4 succeed). The strongest cases are when the underlying tax was paid but the filing was delayed by a verifiable external event.
Reconsideration requests
If you disagree with a penalty (not just want it waived for sympathy), file a Reconsideration Request within 20 working days. The FTA reviews the technical basis and either confirms, varies, or cancels the penalty. The Reconsideration is reviewed by a different officer than the one who issued the penalty.
If your case is technical, e.g., the FTA assessed late filing but you have evidence of timely submission, Reconsideration is the right vehicle. Bring documents: portal screenshots with timestamps, bank confirmations, system logs.
Avoiding the trap
Three habits prevent most late filings: a calendar reminder set 14 days before each deadline; a 'pay now, file tomorrow' policy if you ever doubt the figures; and a backup signatory who can submit if the primary is unavailable. Penalties hurt; the workflow to prevent them is trivial.
Acowntant clients receive automatic deadline alerts and pre-drafted returns 7 days before due. If you are not on Acowntant, consider setting up a shared compliance calendar across finance and management, accountability shouldn't sit with one person.
This guide is general information, not professional advice. For situations that involve specific facts, talk to your accountant, or hire one of ours from the marketplace.