UAE VAT Administrative Penalties 

In today’s stringent regulatory landscape, even a minor slip in VAT Administrative Penalties compliance can snowball into serious financial and operational consequences. Whether it’s a delayed registration, a misfiled return, improper invoicing, or overlooked documentation, the Federal Tax Authority (FTA) doesn’t overlook non-compliance, and penalties can mount quickly, draining your cash flow and credibility.

At Almalia Consulting FZCO, we understand that these penalties are not just numbers — they’re moments of stress, reputational risk, and lost time. That’s why we don’t just manage VAT penalties; we resolve them with precision, compassion, and long-term strategy. With our expert oversight, your business won’t just recover — it will emerge stronger, cleaner, and fortified for the future.

How We Help You with VAT Administrative Penalties

Thorough Penalty Analysis

We conduct a meticulous review of your VAT records, FTA notices, and past filings to trace the exact cause of the penalty. Our forensic-level investigation ensures that no unjustified charge goes unnoticed — and that you’re never punished for what wasn’t your fault.

Clarifications, Objections & Reconsideration Requests

If a penalty is excessive, inaccurate, or issued in error, we prepare strong, well-documented reconsideration requests and clarifications. With deep knowledge of FTA procedures, we frame compelling responses that increase your chances of reduction or waiver.

Strategic Settlement & Voluntary Disclosures

When penalties are valid, we help you settle them smartly. We guide you through voluntary disclosures and structured repayment plans, reducing financial pressure while showing the FTA your intent to comply.

Compliance Correction & Record Fixing

We don’t just treat the symptoms — we fix the cause. Whether it’s invoicing errors, record mismatches, or filing delays, we rebuild your VAT system to ensure future compliance and peace of mind.

Ongoing Monitoring & Compliance Support

Post-resolution, we don’t disappear. We stay with you, tracking your VAT filings, advising on new FTA rules, and preparing you for audits, so penalties never become a recurring nightmare.

What are the administrative penalties imposed by the Federal Tax Authority (FTA) under the Tax Procedures Law in the UAE?

Amendment of administrative penalties. The new resolution amends the administrative penalties listed in  Cabinet Decision No. 40/2017. Some of the key amendments to the administrative penalties listed in the new resolution are as follows (non-exhaustive list):

● AED 20,000 reduced to AED 10,000 for failure of the taxable person to submit a registration application within the timeframe specified in the Tax Law.

 ● AED 10,000 reduced to AED 1,000 monthly (not exceeding AED 10,000) for failure of the registrant to submit a deregistration application within the timeframe specified in the Tax Law.

● AED 15,000 reduced to AED 5,000 for failure by the taxable person to display prices inclusive of VAT.

● AED 5,000 (for each tax invoice) reduced to AED 2,500 (for each instance discovered) for failure by the taxable person to issue a tax invoice / tax credit note or an alternative document when making any supply.

● AED 5,000 (for each tax invoice) reduced to AED 2,500 (for each instance discovered) for failure by the taxable person to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes. 

Moreover, the percentage based penalties applicable to the late payment of the tax due – in the tax return or in the voluntary disclosure or in the tax assessment – are reduced and the 1% daily penalty previously imposed is eliminated.The new late payment penalty is now calculated as follows (the 300% cap still applies):

2% of the unpaid tax due on the day following the payment due date:-

● 4% monthly penalty due after one (1) month from the payment due date, and on the same date every month thereafter, on the amount of tax that has not been paid to date. The voluntary disclosure penalties that are applicable to the difference between the tax declared and the
tax due are now linked to the period during which the taxpayers amend the previously submitted VAT returns and range between 5% (in case the voluntary disclosure was submitted within 1 year from the due date of tax return or tax assessment or refund application) and 40% (in case the voluntary disclosure was submitted after the 4th year).

Please refer to the Cabinet Resolution No.49/2021 for a comprehensive list of the amended
administrative penalties for violations of tax laws in the UAE.