UAE VAT Penalties Explained

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

VAT penalties in the UAE are administrative and can add up quickly, especially late-payment penalties that grow over time. Here is a plain guide to the main ones and how to keep clear.

Registration and filing

• Late VAT registration: AED 10,000
• Late filing of a VAT return: a fixed penalty for the first offence and a higher one for repeats
• Late payment: a percentage of the unpaid tax that increases the longer it is outstanding

Errors in returns

If you discover an error in a submitted return, a voluntary disclosure (Form 211) lets you correct it. Disclosing proactively generally means lower penalties than waiting for the FTA to find the error on audit.

Record keeping

Not keeping the required records, not issuing valid tax invoices, or not displaying prices inclusive of VAT can all attract penalties. Good records are the cheapest insurance.

If you receive a penalty

You can request reconsideration within the set time limit if you believe a penalty was applied incorrectly or you have a reasonable excuse. The request must be in Arabic and supported by evidence, which is where a tax agent helps.

Frequently asked questions

What is the penalty for late VAT registration?

AED 10,000, the same as for Corporate Tax.

How can I correct a VAT error?

Through a voluntary disclosure (Form 211), which usually results in lower penalties than an error found by the FTA on audit.

Can VAT penalties be appealed?

You can file a reconsideration request within the time limit, supported by evidence and submitted in Arabic.

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