Penalties Introduced for Late Corporate Tax Payments in the UAE

Taxpayers in the UAE who fail to pay their corporate tax on time will now face new financial penalties, as clarified by the Federal Tax Authority (FTA).

The FTA outlined that a monthly penalty of 14% per annum will be imposed on the unpaid tax amount. This penalty begins accruing the day after the payment deadline and continues to accumulate on the same date each subsequent month until the full amount is settled.

Under Federal Decree-Law No. 47 of 2022 on Corporate Tax, taxpayers must meet their obligations within nine months following the conclusion of the relevant tax period. The introduction of penalties aims to encourage compliance and align tax practices with international fiscal standards.

For further assistance, businesses are encouraged to consult the FTA’s resources or seek professional advice to ensure full compliance with the Corporate Tax Law.