Taxable persons in Dubai that missed the September 30, 2026 corporate tax return deadline may now face monthly late-filing penalties. Bestax Chartered Accountants, an FTA Approved Tax Agency in Business Bay, is urging businesses to check their position now.
September 30 was the filing and payment deadline for taxable persons whose tax period ended on December 31, 2025. Late filing attracts AED 500 for each month or part-month during the first 12 months. Separately, unpaid payable tax attracts a 14% annual penalty, calculated monthly. A late return with no payable tax does not attract a late-payment penalty.
Below are the deadlines you must meet, the penalties in force as of October 2026, and the steps that keep you clear of them.
The Corporate Tax Deadlines Your Business Must Meet
UAE companies subject to corporate tax must register, regardless of revenue. This includes free zone companies and eligible businesses claiming Small Business Relief. Exempt persons have different registration obligations depending on their category.
| Obligation | Deadline | Penalty if missed |
| Registration (UAE-incorporated resident juridical persons established on or after March 1, 2024) | Within three months of incorporation | AED 10,000 |
| Tax return | Within nine months of the end of your tax period | AED 500 a month, then AED 1,000 a month after 12 months |
| Tax payment | Same date as the return | 14% a year on the unpaid tax, charged monthly |
| Record keeping | Seven years from the end of the tax period | AED 10,000, or AED 20,000 for a repeat within 24 months |
1. Registration
FTA Decision No. 3 of 2024 gives UAE-incorporated resident juridical persons established on or after March 1, 2024 three months from incorporation, establishment or recognition to register. Other categories have different timelines. Late registration attracts AED 10,000, subject to any applicable waiver.
For a new or late registration, Bestax:
- Checks your trade license date against the FTA’s registration timeline
- Prepares the EmaraTax application with your license, Memorandum of Association and shareholder documents
- Confirms whether your first tax period still qualifies for the late registration waiver
2. Tax Return Filing
Your return is due nine months after your tax period ends. A December year end means September 30 of the following year, and a June year end means March 31.
Filing one day late triggers the first AED 500. From the 13th month, the charge doubles to AED 1,000 a month, with no cap.
To get your return in on time, our team:
- Sets a year-end close calendar that works back from your filing date, with a target close date agreed for your engagement
- Prepares financial statements and arranges an audit where your free zone or the 0% qualifying rate requires one
- Has a senior accountant review the tax computation before you approve the return
3. Tax Payment
Payment is due on the same date as the return. The full payable tax must generally be settled by that deadline. Businesses should budget for this payment in advance.
Unpaid tax attracts 14% a year, charged for each month or part of a month.
Before the payment falls due, Bestax:
- Estimates your tax liability during the year so the payment is budgeted early
- Checks whether you can elect for Small Business Relief. Eligible resident persons must have revenue of AED 3 million or less in the relevant and all previous tax periods. Qualifying Free Zone Persons and specified multinational enterprise group members cannot claim it. Ministerial Decision No. 131 of 2026 extends the relief to tax periods ending on or before December 31, 2029
- Sends you the exact amount and payment reference before the due date
Companies with a June 30, 2026 year end must file and pay by March 31, 2027.
UAE Corporate Tax Penalties as of October 2026
Cabinet Decision No. 75 of 2023, as amended, sets every corporate tax penalty below. Cabinet Decision No. 129 of 2025 reformed VAT and excise penalties from April 14, 2026, but left these unchanged.
| Violation | Penalty | How Bestax prevents it |
| Late registration | AED 10,000 | Checks your applicable registration deadline and submits the application |
| Late deregistration | AED 1,000 a month, up to AED 10,000 | Checks the cessation, dissolution or liquidation date and applicable deregistration deadline |
| Late tax return | AED 500 a month for 12 months, then AED 1,000 a month | Runs a close calendar that finishes the return weeks before the deadline |
| Late payment | 14% a year on the unpaid tax, charged monthly | Budgets your liability during the year and confirms the payment amount |
| Records not kept | AED 10,000, or AED 20,000 for a repeat within 24 months | Keeps your ledgers, invoices and contracts in a seven-year archive |
| Records not provided in Arabic on request | AED 5,000 | Arranges certified Arabic translations when the FTA asks |
| Tax record changes not reported | AED 1,000, or AED 5,000 for a repeat within 24 months | Updates EmaraTax when your address, activity or shareholders change |
| No cooperation with a tax audit | AED 20,000 | Acts as your tax agent and manages every audit request |
| Incorrect tax return | AED 500, unless corrected before the filing deadline | Reviews each return before you approve it |
| Error corrected by voluntary disclosure | 1% a month on the tax difference | Runs a post-filing review and files disclosures promptly |
| No voluntary disclosure before notification of a tax audit | 15% of the tax difference, plus 1% a month | Finds and discloses errors before the FTA does |
How Penalties Add Up
Separate violations can attract separate penalties. Filing late and leaving payable tax unpaid can therefore create two charges. Take a company that registered late, owes AED 1 million in tax, and incurs six chargeable months of late-filing and late-payment penalties. Assume the unpaid balance stays unchanged and the registration fine has not been waived.
| Penalty | Calculation | Amount |
| Late registration | Fixed | AED 10,000 |
| Late filing | Six months × AED 500 | AED 3,000 |
| Late payment | 14% × AED 1,000,000 × 6/12 | AED 70,000 |
| Total on top of the tax | AED 83,000 |
On an AED 500,000 tax difference, failure to disclose before notification of a tax audit can attract a fixed AED 75,000 penalty, plus the applicable monthly 1% penalty. A qualifying disclosure submitted before audit notification avoids the fixed 15% charge, but other penalties may still apply.
Transfer Pricing Documentation
Transfer pricing documentation failures can attract the general record-keeping penalty of AED 10,000, or AED 20,000 for a repeat within 24 months. Related return errors and tax shortfalls can create additional penalties. These amounts are not a limit on total exposure.
Under Ministerial Decision No. 97 of 2023, you must keep a master file and local file if your revenue reaches AED 200 million, or you belong to a multinational enterprise group with consolidated revenue of AED 3.15 billion or more. The FTA can ask for them with 30 days to respond. The related-party schedule is required where aggregate transactions exceed AED 40 million, with categories exceeding AED 4 million disclosed. Dividends between related parties are excluded from these thresholds. A separate connected-person schedule applies where the relevant transactions exceed AED 500,000.
For groups with related-party transactions, we:
- Map your related-party and connected-person transactions each year
- Prepare the disclosure form and benchmarks your prices against arm’s length rates
- Build the master file and local file before year end when you cross the thresholds
Corporate tax deregistration applications generally must be filed within three months of cessation of business, dissolution, liquidation or the entity ceasing to exist, as applicable.
Tax Evasion
Deliberate underpayment is a crime, not an administrative breach. Article 25 of the Tax Procedures Law, Federal Decree-Law No. 28 of 2022, provides for imprisonment and/or a monetary penalty from the amount of evaded tax up to three times that amount.
Most businesses never come near this line. The protection is accurate records and prompt disclosure of any error you find.
VAT Penalties After the April 2026 Reform
VAT penalties sit in a separate regime. Cabinet Decision No. 129 of 2025 changed several of them from April 14, 2026.
| Violation | Penalty from April 14, 2026 | Before |
| Late VAT registration | AED 10,000 | Unchanged |
| Late VAT return | AED 1,000, or AED 2,000 for a repeat within 24 months | Unchanged |
| Late VAT payment | 14% a year on the unpaid tax, charged monthly | 2% the day after the deadline, then 4% monthly starting one month after the deadline, capped at 300% |
| Incorrect VAT return | AED 500, subject to correction exceptions | AED 1,000, or AED 2,000 for a repeat |
| Error corrected by voluntary disclosure | 1% a month on the tax difference | 5% to 40% by time elapsed |
| Tax invoice or credit note not issued within the required period | AED 2,500 per case | AED 2,500 per detected case; timing wording clarified in 2026 |
| Tax record changes not reported | AED 1,000, or AED 5,000 for a repeat | AED 5,000, or AED 10,000 for a repeat |
The AED 500 incorrect-return penalty does not apply where the return is corrected before its submission deadline, or a voluntary disclosure corrects it without changing the amount of due tax. Repeat tax-record violations are assessed within 24 months.
On the VAT side, Bestax:
- Files your VAT return each quarter or month and reconciles output VAT to your sales ledger
- Checks your invoice template against the FTA’s required fields
- Flags reverse charge entries and input VAT claims that the FTA commonly rejects
How Bestax Helps Reduce Your Penalty Risks
Bestax Chartered Accountants is FTA Approved Tax Agency No. 30008692. Haseeb Hamdani, FCCA, UAE-CA and FTA Approved Tax Agent, leads a team of more than 35 professionals.
Depending on the agreed engagement, corporate tax support can include the following six steps.
- Compliance health check. We log in to your EmaraTax account with you and confirm your registration, Tax Registration Number, tax period and any open penalties. You get a written list of every deadline you face.
- Tax agent appointment. You appoint Bestax as your tax agent on EmaraTax. Within the scope of the appointment, we help manage FTA notices, information requests and tax-audit correspondence.
- Monthly bookkeeping and year-end close. We keep your books monthly, so the year-end close takes weeks, not months. We agree a close calendar with you, aiming to leave enough time for review and filing. Timing depends on complete records and the work required.
- Tax computation and review. We calculate taxable income, apply exempt income and reliefs, and test whether Small Business Relief or the free zone 0% rate applies. A senior accountant reviews every return before you approve it.
- Filing and payment. We file the return through EmaraTax and send you the exact payment amount and reference before the due date.
- Post-filing review. We recheck each return after filing. If we find an error, we file a voluntary disclosure before the FTA raises it, which can avoid the fixed 15% penalty where disclosure is submitted before notification of a tax audit. Other applicable penalties may remain.
You approve each return before it goes in, and you see every FTA letter we receive. See the full range of corporate tax services from Bestax Chartered Accountants.
What to Do If You Have Already Been Penalized
A penalty notice is not always final. Three routes can remove or limit it.
Check the Late Registration Waiver
The FTA’s late registration penalty waiver cancels the AED 10,000 fine if you file your first return within seven months of the end of your first tax period. The usual limit is nine months.
The FTA applies the waiver automatically when the conditions are met. If the penalty has already been paid, the amount is credited to your EmaraTax account. You can use that credit against other tax liabilities or submit a refund application. The waiver covers only a business’s first tax period.
For first periods ending December 31, 2025, the window closed on July 31, 2026. Newer companies must check their own dates now.
We compare your first tax period end date with your filing date. If the window is still open, we file inside it so the FTA cancels the fine.
Request a Reconsideration
Article 29 of the Tax Procedures Law, Federal Decree-Law No. 28 of 2022, lets you ask the FTA to reconsider a penalty. You must submit a reasoned request on EmaraTax within 40 business days of notification.
The FTA ordinarily has 40 business days to decide and five business days to notify you, subject to applicable extensions. An objection to the Tax Disputes Resolution Committee generally must be submitted within 40 business days of notification of the reconsideration decision. Admissibility conditions include prior reconsideration and full payment of the disputed tax.
Missing a deadline can make a challenge inadmissible. Extensions may be available under prescribed conditions, so assess the relevant rules promptly.
To challenge a penalty, Bestax:
- Reviews the penalty notice against Cabinet Decision No. 75 of 2023 to confirm it was applied correctly
- Gathers the evidence that supports your case, such as proof of a system outage or an earlier submission
- Drafts and files the reconsideration request on EmaraTax inside the 40-day window, and helps coordinate any further dispute steps with an appropriately authorised representative where needed
Correct Errors Before an Audit
Submit a voluntary disclosure as soon as you find an error in a filed return. Submitting a qualifying disclosure before notification of a tax audit can avoid the fixed 15% penalty. The applicable monthly 1% tax-difference penalty and other charges may still apply.
Book a Free Corporate Tax Review
A free 20-minute call helps identify your corporate tax obligations and possible penalty risks. A full assessment may require records and a separate engagement. A Bestax tax advisor will:
- discuss your registration status and relevant filing deadlines
- explain how to review existing penalties and assess possible waiver or challenge routes
- explain the proposed scope of support and provide a fee quote before agreed work begins
There is no obligation. Call +971 4 585 3215, WhatsApp +971 56 798 1808 or email info@bestaxca.com.]
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About Bestax Chartered Accountants
Bestax Chartered Accountants is a chartered accountancy firm and FTA Approved Tax Agency (No. 30008692) in Business Bay, Dubai, with a second office in Mississauga, Canada. The firm is an ACCA and ICAEW Approved Employer. Its services cover company setup, accounting, VAT, corporate tax, audit support and visas for businesses across the UAE.
Media contact: Bestax Chartered Accountants Office 601, Damac Executive Bay Tower B, Al A’amal Street, Business Bay, Dubai, UAE info@bestaxca.com | +971 4 585 3215
