Estimate your potential VAT penalties before they escalate. Our free UAE VAT penalty calculator helps Dubai SMEs understand late filing, late payment, and voluntary disclosure penalties as per FTA regulations.
Understanding FTA penalties is the first step to avoiding them. Below are the current VAT penalty rates as per UAE Federal Tax Authority guidelines.
Failing to register for VAT when mandatory threshold is exceeded
First offense for missing VAT return deadline
Repeated late filing within 24 months
2% immediately + 1% daily up to 300%, then 4% monthly thereafter
Filing incorrect information, up to 50% of unpaid tax
Self-reporting errors before FTA audit (reduced penalty)
The FTA's late payment penalty structure is progressive and can escalate quickly. Here's the breakdown:
2% of unpaid tax applied on the first day after the due date
1% daily penalty up to 300% of the daily penalty amount
4% monthly on the unpaid tax, compounding indefinitely
* Simplified example. Actual penalties may vary based on FTA calculation methods.
Made an error on your VAT return? Filing a Voluntary Disclosure before an FTA audit can reduce your penalty from up to 50% of unpaid tax down to just 5%. Our team has successfully filed hundreds of voluntary disclosures for Dubai businesses.
AED 100,000 error = AED 50,000 penalty
AED 100,000 error = AED 5,000 penalty
Save AED 45,000 by disclosing first
Prevention is always better than cure. Follow these steps to stay compliant with FTA requirements.
Register within 30 days of exceeding AED 375,000 threshold
Don't wait until the 28th—file by the 20th to catch errors
Pay VAT due on submission, not on the deadline
Maintain 5 years of records for FTA audits
Have a tax consultant review your VAT position quarterly
Get our free 15-point checklist to ensure you never face FTA penalties. Includes filing deadlines, document requirements, and common mistakes to avoid.
No spam. Unsubscribe anytime.
Common questions about VAT penalties in UAE
Don't let penalties escalate. Our tax experts can help you file voluntary disclosures, apply for waivers, and get compliant fast.
Serving SMEs across Dubai, Abu Dhabi, Sharjah & all UAE Emirates