AED 10,000
Late registration
A one-time administrative penalty applies if you fail to register for Corporate Tax with the Federal Tax Authority (FTA) by your deadline. It is charged regardless of whether any tax is ultimately due.
Corporate Tax compliance · UAE
UAE Corporate Tax penalties, and how to avoid them
Missing a Corporate Tax obligation is costly. This guide sets out the FTA penalties for late registration, late filing, late payment, poor record-keeping, and late deregistration — and the simple habits that keep UAE businesses clear of them.
Why Corporate Tax penalties matter
The UAE introduced Corporate Tax for financial years beginning on or after 1 June 2023, taxing income at 0% up to AED 375,000 and 9% above that. Alongside the tax itself, the FTA enforces a set of administrative penalties for missing the deadlines and duties that come with it.
Most penalties have nothing to do with how much tax you owe — they are triggered by missing a deadline or a duty, such as failing to register or file on time. That means a business fully within the 0% band can still be penalised if it neglects registration, filing, or record-keeping.
The good news: every penalty below is avoidable with a clear calendar and clean books. Here is what the FTA charges, and how to stay ahead of it.
The main Corporate Tax penalties
The FTA penalties every taxable person should have on their radar.
14% per annum
Late payment of tax
Unpaid Corporate Tax attracts a late-payment penalty of 14% per year, accrued monthly on the outstanding amount until it is settled. The longer tax stays unpaid, the more it compounds.
AED 500 / month
Late filing of the return
A late-filing penalty of AED 500 per month applies for the first 12 months the return is overdue, then rises to AED 1,000 per month from month 13 onward.
AED 10,000
Failure to keep records
Failing to maintain the records and information the law requires carries a penalty of AED 10,000 — rising to AED 20,000 if the same failure is repeated within 24 months.
Penalties are set by the FTA and may be updated. Always confirm current figures on the FTA portal before relying on them.
Late registration: AED 10,000
Registration is the first obligation, and the one businesses most often miss. Every taxable person must register with the FTA by their deadline, which depends on when the entity's licence was issued or when it was incorporated. Missing that date carries a one-time penalty of AED 10,000.
Because the deadline is driven by your licence-issue month, it is easy to overlook. Confirm exactly when yours falls in our Corporate Tax registration deadline guide, and see the step-by-step process in our Corporate Tax registration services.
Late filing and late payment
The Corporate Tax return and any payment share a single deadline: within 9 months of the end of the tax period. Miss the return and the late-filing penalty is AED 500 per month for the first 12 months, then AED 1,000 per month from month 13. Leave the tax unpaid and a separate 14% per-annum penalty accrues monthly on the outstanding amount.
These two penalties stack — a business that files late and pays late is exposed to both at once. Filing and paying together, ahead of the 9-month mark, is the cleanest way to close off the risk. Our Corporate Tax filing services keep both obligations on schedule.
Record-keeping: AED 10,000 (AED 20,000 repeat)
The FTA requires taxable persons to keep the records and information that support their Corporate Tax position. Failing to do so is penalised at AED 10,000, doubling to AED 20,000 where the same failure recurs within 24 months.
In practice, "keeping records" means being able to reconstruct and defend the numbers on your return. That typically includes:
- Financial statements prepared under IFRS, plus the underlying ledgers and trial balance.
- Records supporting the Corporate Tax computation — exempt income, disallowed expenses, and adjustments.
- Documentation for any relief or election claimed, such as Small Business Relief or free-zone status.
- Transfer pricing documentation where related-party or connected-person thresholds are met.
- Records kept for the retention period set by the FTA so they are available if a review is opened.
Deregistration penalties
Registration is not only a starting obligation — it also has to be ended correctly. When a business ceases activity, it must apply to deregister within 3 months of cessation and submit a final Corporate Tax return with full settlement of any tax due.
Missing the deregistration window triggers a penalty starting at AED 1,000, then AED 1,000 per month, capped at AED 10,000. Closing a company cleanly on the tax side avoids a bill that keeps growing after the business has stopped trading.
How to avoid Corporate Tax penalties
- Register on time — check your deadline the moment you know your licence-issue month or incorporation date.
- File the return AND pay within 9 months of the tax period end; both obligations share the same deadline.
- Keep IFRS-based books current so the year-end computation is fast and defensible.
- Deregister within 3 months of ceasing business, with a final return and full settlement.
- Reconcile before you file — a wrong figure corrected late can still trigger penalties.
For the full picture of rates, thresholds, and reliefs, read the UAE Corporate Tax guide.
How AIMuhaseb helps
Stay penalty-free, from books to filing
AIMuhaseb keeps IFRS-based double-entry accounts and tracks your Corporate Tax deadlines, so registration, filing, and payment all happen on time. Because your Trial Balance, P&L, and Balance Sheet stay current, the records the FTA expects are already in place — and the year-end computation is built on numbers you can defend.
Deadline tracking for registration and filing
IFRS records kept audit-ready
CT computation from your ledger
Specialist review before you file
FAQ
Corporate Tax penalty questions, answered
What is the penalty for late Corporate Tax registration in the UAE?
Failure to register for Corporate Tax with the FTA by your deadline carries a one-time administrative penalty of AED 10,000. It applies even if your taxable income falls within the 0% band or you plan to claim Small Business Relief, because registration itself is mandatory.
How much is the late-payment penalty for Corporate Tax?
Corporate Tax paid late attracts a penalty of 14% per annum, accrued monthly on the outstanding tax until it is paid. Because it accrues month by month, settling as soon as possible limits how much builds up.
What is the late-filing penalty for the Corporate Tax return?
A late Corporate Tax return is charged at AED 500 per month for the first 12 months it is overdue, then AED 1,000 per month from the thirteenth month onward. The return and the tax payment are both due within 9 months of the end of the tax period.
What happens if I do not keep proper Corporate Tax records?
Failing to keep the records and information required under the Corporate Tax law carries a penalty of AED 10,000, rising to AED 20,000 where the same failure is repeated within 24 months. Keeping IFRS-based books and supporting documentation throughout the year is the simplest way to stay clear of this.
Are there penalties for late deregistration?
Yes. When a business ceases activity it must apply to deregister within 3 months and file a final return with full settlement. Missing the deregistration deadline triggers a penalty starting at AED 1,000 and then AED 1,000 per month, capped at AED 10,000.
Do Corporate Tax penalties apply even if my income is within the 0% band?
Yes. Obligations such as registering, filing, and keeping records apply to all taxable persons, including those whose taxable income is entirely within the 0% band. Penalties for missing those obligations can therefore apply even when no tax is payable.
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