The Federal Tax Authority (FTA) enforces strict penalties to encourage compliance. These penalties apply to VAT, corporate tax, excise tax, and general obligations such as registration.
Common Penalties
• Late VAT Filing: AED 1,000 for the first offense, AED 2,000 for repeat.
• Late Corporate Tax Registration: AED 10,000 fine.
• Errors in Returns: Penalties based on percentage of unpaid tax.
• Failure to Keep Records: Fines starting from AED 10,000.
How to Avoid Penalties
• Track deadlines carefully.
• Maintain organized invoices and ledgers.
• Reconcile quarterly.
• Seek reconsideration in genuine cases.
Conclusion
FTA penalties are costly but avoidable. With discipline and professional guidance, businesses can stay compliant and protect their reputation.