Business Setup in Dubai UAE – Ventures Buddy

Implemented in 2023, the corporate tax regime of the UAE provides a competitive business environment. Nonetheless, it is vital to adhere to tax regulations in order to prevent severe penalties. The potential repercussions of failing to comply with corporate tax registration and filing obligations in the UAE are examined in this blog.

Fines for Late or Omitted UAE Corporate Tax Registration

It is compulsory for businesses that surpass the threshold of AED 375,000 in taxable supplies and imports within a 12-month period to register for UAE corporate tax. Subsequent failure to register may lead to substantial monetary penalties:
  • The initial penalty for late registration is one thousand AED.
  • Further Penalties: Thepenalty is subject to a monthly increase of AED 1,000, with a maximum cap of AED 10,000. As a consequence, delays can be extremely expensive.

Penalties for Late or Incorrect Corporate Tax Return Submission

It is vital to file accurate and timely tax returns. Anticipate the following in the event of falling behind:
  • Initial Penalty: An initial penalty of 500 AED shall be imposed for each month (or fraction thereof) of postponement within the initial twelve months subsequent to the payment due date.
  • Increased Penalty: Following the initial year, the penalty is augmented to AED 1,000 for each subsequent month (or fraction thereof) of delay.

Additional Penalties for Non-Compliance

In addition to failures to register and file, the following other noncompliance issues may result in penalties: 

  • Failing to Maintain Proper Records: Noncompliance with the stipulations of UAE tax legislation regarding the maintenance of accurate financial records may result in a penalty of AED 10,000 for a primary infraction. Recurrences of the offence within a 24-month period may result in a penalty increase to AED 20,000.
  • Submitting Incorrect Tax Returns: Intentionally submitting inaccurate tax returns with the intent to evade taxation may lead to substantial financial penalties and, in severe cases, criminal prosecution.

Ensuring UAE Corporate Tax Compliance

penalties must be avoided to maintain a thriving business environment. Listed below are some suggestions for ensuring compliance:

Register for Corporate Tax on Time: In order to prevent late registration penalties, it is imperative that businesses that meet the taxable suppliers and imports threshold promptly register for corporate tax.

File Tax Returns Accurately and Timely: Ensure that the information included on your corporate tax returns is accurate and complete, and meet all submission deadlines.

Maintain Proper Records: Maintain comprehensive financial records for the required period, as required by the UAE tax authorities.

Seek Professional Help:A tax advisor or accountant with expertise in UAE corporate tax can assist with navigating the complexities and guaranteeing compliance. 


Businesses operating in the UAE must have a comprehensive understanding of the potential penalties that may result from non-compliance with UAE corporate tax registration and submission requirements. By proactively overseeing your tax responsibilities and consulting with experts when necessary, you can guarantee a seamless process and circumvent any adverse financial consequences. Maintaining compliance and optimizing business prospects within the flourishing corporate environment of the United Arab Emirates necessitates the observance of opportune registration, precise filing, and diligent record-keeping.

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