VTA Administrative Penalties
What are Administrative Penalties?
Administrative penalties are monetary fines imposed by the Federal Tax Authority (FTA) on any person or business that breaches the provisions of the UAE Tax Law. These penalties are designed to ensure that all taxable persons comply with their VAT and other tax-related responsibilities.
When shall Administrative Penalties be imposed?
Administrative Penalties shall be imposed on the violations listed in the tables (1), (2) and (3).
Tables of Violations and Administrative Penalties Appendix to the Cabinet Decision No. (40) of 2017
Table (1): Violations and Administrative Penalties related to the Implementation of the Federal Law No. (7) of 2017 on Tax Procedures.
Administrative Penalties in the UAE
Administrative penalties are monetary fines imposed by the Federal Tax Authority (FTA) on any person or business that breaches the provisions of the UAE Tax Law. These penalties are designed to ensure that all taxable persons comply with their VAT and other tax-related responsibilities.
The Administrative Penalties for Non-Compliance have been outlined in Cabinet Decision No. (40) of 2017.
As per the law, the FTA issues an administrative penalties assessment and notifies the concerned person within five (5) business days of the violation.
Table (1): Violations and Administrative Penalties related to Tax Procedures Law
| Description of Violation | Administrative Penalty (AED) |
|---|---|
| Failure to keep required records and other information specified in the Tax Procedures Law and Tax Law | 10,000 (first time), 50,000 (repeat) |
| Failure to submit data, records, and documents in Arabic to the Authority when requested | 20,000 |
| Failure to submit a VAT registration application within the specified timeframe | 20,000 |
| Failure to submit VAT deregistration application within the specified timeframe | 10,000 |
| Failure to inform the Authority of any changes requiring amendment of tax record | 5,000 (first time), 15,000 (repeat) |
| Failure of a Legal Representative to notify the FTA of appointment within timeframe | 20,000 |
| Failure of a Legal Representative to file Tax Return within timeframe | 1,000 (first time), 2,000 (repeat within 24 months) |
| Failure to submit Tax Return within timeframe | 1,000 (first time), 2,000 (repeat within 24 months) |
| Failure to settle payable tax on time | 2% immediately, 4% after 7 days, 1% daily after 1 month (max 300%) |
| Submitting incorrect Tax Return | 3,000 (first time), 5,000 (repeat) |
| Voluntary Disclosure of errors | 3,000 (first time), 5,000 (repeat) |
| Failure to voluntarily disclose errors before notification of audit | 3,000 (first time), 5,000 (repeat) |
| Failure to facilitate the work of the Tax Auditor | 20,000 |
| Failure to calculate tax on behalf of another person when required | Late payment penalties as above (max 300%) |
| Failure to account for tax due on import of goods | 50% of unpaid or undeclared tax |
Table (2): Violations and Administrative Penalties related to Excise Tax Law
| Description of Violation | Administrative Penalty (AED) |
|---|---|
| Failure to display prices inclusive of Tax | 15,000 |
| Failure to comply with transfer/storage rules for Excise Goods | Higher of 50,000 or 50% of due tax |
| Failure to provide price lists for Excise Goods | 5,000 (first time), 20,000 (repeat) |
Table (3): Violations and Administrative Penalties related to VAT Law
| Description of Violation | Administrative Penalty (AED) |
|---|---|
| Failure to display prices inclusive of VAT | 15,000 |
| Failure to notify the FTA of applying tax based on the margin scheme | 2,500 |
| Failure to comply with Designated Zone goods procedures | Higher of 50,000 or 50% of due tax |
| Failure to issue a tax invoice or alternative document | 5,000 each |
| Failure to issue a tax credit note or alternative document | 5,000 each |
| Failure to comply with e-invoicing/e-credit note rules | 5,000 per incorrect document |
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Right to Object to Administrative Penalties
A taxable person has the right to object to any administrative penalties imposed by the FTA. A reconsideration request must be submitted within 20 business days from the date of notification, along with reasons and supporting evidence.
When the FTA May Reduce or Waive Administrative Penalties
The FTA may reduce or waive penalties if:
The person has a valid excuse acceptable to the Authority.
Evidence is provided to justify the excuse and the resulting violation.
The application is submitted within 10 business days after the excuse ends.
No penalties were imposed in the last 2 years.
The violation has been corrected.
Al Fakher Accounting offers expert Tax Consultancy Services in Dubai and across the UAE, including:
VAT Consultancy
Excise Tax Advisory
Tax Agent Representation
Tax Compliance Reviews
VAT Tax Planning & Advisory
Assistance with Administrative Penalty Objections
VAT Return Filing & Record-Keeping Support
With our professional team, we help you avoid penalties, stay compliant, and focus on growing your business with peace of mind.