The UAE's tax authority on Wednesday announced updated penalty rules that lower some fines and make tax filing rules easier and more flexible for businesses and taxpayers in the Emirates.
The Federal Tax Authority (FTA) announced that new rules under Cabinet Decision No. (129) of 2025 took effect on Tuesday, April 14. The decision updates fines and penalties for violations of UAE tax laws, replacing parts of the rules in Cabinet Decision No. (40) of 2017.
The amendments introduce reduced or revised administrative penalties across Value Added Tax (VAT), Excise Tax, and tax procedures regulations. They focus on encouraging voluntary compliance and timely updates to tax records.
According to the FTA, key changes include reducing the penalty for failing to submit Arabic-language tax records upon request from Dh20,000 to Dh5,000. The penalty for failing to notify the authority of changes requiring updates to tax records is now Dh1,000 per violation, rising to Dh5,000 for repeat offences within 24 months.
The penalty for a legal representative failing to notify the FTA of their appointment has been reduced from Dh10,000 to Dh1,000, payable from the representative’s own funds.
The FTA also confirmed revisions to penalties for late tax payments, incorrect tax returns, and voluntary disclosures, including cases where taxpayers correct errors before or after a tax audit notification.
