What Is UAE Corporate Tax? (Brief Recap)
- The UAE introduced a federal corporate tax (CT) under Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023.
- It applies generally to taxable persons doing business in the UAE (mainland, free zones if requirements met, etc.).
- The tax rate: 0% on taxable income up to AED 375,000, 9% on amounts above that.
- Entities must register, maintain proper records, file a tax return (or annual declaration if exempt), and pay any tax due within 9 months after the end of their financial (tax) year.
Because the regime is relatively new, many businesses are still adapting to the compliance landscape. Missing deadlines can carry serious consequences.
The Scenario: Missed the September 30, 2025 Deadline — What Now?
Suppose your company’s tax year ended on 31 December 2024, and the 9-month deadline to file (and pay) would thus fall around 30 September 2025 (which is consistent with FTA’s reminder).
Here’s what typically unfolds when a taxable person does not file or pay on time:
What Happens Immediately After the Deadline
- Late-filing penalty accrual
- The FTA imposes administrative penalties for late submission of the tax return (declaration) starting from the day after the due date.
- For the first 12 months of delay, the penalty is AED 500 per month or part thereof for each month of delay.
- After the 13th month, the rate increases to AED 1,000 per month or part thereof.
- Interest / surcharge on unpaid tax
- A 14% per annum interest is charged on the unpaid tax (i.e., the amount of corporate tax liability) from the day after the payment deadline.
- This interest is applied monthly (i.e. a pro rata monthly portion).
- Other administrative penalties for violations
- Failing to maintain proper accounting records: AED 10,000 for each violation. Repeated violations (within 24 months) may attract AED 20,000.
- Failure to register (if required) by the deadline: AED 10,000 penalty for late registration.
- Failing to notify changes in tax records (e.g. address, structure): AED 1,000 per violation; repeat violations can incur AED 5,000 within 24 months.
- Failing to comply with an FTA audit request (not providing records or cooperation): AED 20,000 penalty.
- Filing an incorrect return (negligence or error) can attract a AED 500 penalty (if not corrected before the deadline).
- Repeated or serious incorrect filing (especially if the tax difference is discovered by FTA) – up to 15% penalty or more, plus monthly surcharge of 1% from due date until correction or assessment.
- Possible forced assessment / audit & adjustment
- The FTA may perform an audit and make assessments based on its estimation if you fail to file or cooperate. You could be liable for additional tax, penalties, or interest.
- In case of underreporting or mistakes, the FTA may disallow deductions, reclassify items, or apply adjustments in your favor or theirs.
- Loss of benefits / waiver eligibility
- The FTA has recently introduced a waiver initiative allowing the late registration penalty (AED 10,000) to be waived if certain conditions are met (e.g. filing within 7 months of end of first tax period).
- However, that waiver is generally for the first tax period only and does not necessarily cover ongoing late filing / late payment penalties beyond that.
- Reputational / Business Impact
- Noncompliance raises red flags for investors, lenders, auditors, partners, and regulatory counterparts.
- It can damage your business’s credibility and result in increased scrutiny in future audits.
- It may impact licensing, ability to bid for contracts, or attractiveness to stakeholders who expect financial compliance.
- Although the FTA does not publicly publish individual penalty records, extreme or repeated noncompliance might affect your public reputation, credibility, and possibly regulatory scrutiny.
When Can You File Again (after missing the deadline)?
- You should file as soon as possible — even after the deadline — because the sooner you file, the lower your accumulating penalties and interest.
- The FTA still accepts late corporate tax returns after the due date (unless the law or regulations explicitly bar it) — the return is submitted, but with penalties and interest.
- If your missed filing is your first tax period, and you file the return within 7 months from the end of that tax period, you may qualify for waiver / credit of the AED 10,000 late-registration penalty (if registration was delayed) or refund of penalty if already paid.
- After that 7-month window or for subsequent tax periods, the waiver typically does not apply; you’ll be liable for all applicable penalties.
- Even if the registration was late, you must complete the registration process and then file your return (or annual declaration) via EmaraTax.
Example: Missed Deadline & Penalties Accumulation
Let’s assume your company owed AED 100,000 in corporate tax. You missed the deadline and filed 14 months late. Here’s how penalties might stack:
| Component | Estimate / Rate | Notes |
|---|---|---|
| Late-filing penalty | First 12 months: AED 500 × 12 = AED 6,000 13th month (partial): AED 1,000 | Total for delay = AED 7,000 |
| Interest on unpaid tax | 14% per annum, applied monthly on AED 100,000 | ~ AED 14,000 / year, ~ AED 1,166/month → for 14 months ~ AED 16,324 (simplified estimation) |
| Possible audit adjustments / further penalties | If FTA finds issues, additional penalty up to 15% + surcharge 1% per month until assessment | Could add many thousands more |
| Record-keeping penalty, etc. | If records are insufficient: AED 10,000 or more |
So in this example, your total extra cost (just from penalties + interest) could easily surpass AED 23,000+, besides reputational costs and possible additional fines from audit.
Are These Penalties Public?
- The FTA does not generally publish individual company tax returns, penalties, or noncompliance publicly. The data is treated as confidential and subject to tax confidentiality rules.
- The FTA does publish general guidance, public clarifications, statistical / open data (stripping confidential details).
- However, in practice, severe noncompliance (especially for large firms) can be noticed via regulatory channels, media, or sector reputation.
- Also, if your business is audited or regulated under other authorities, they may see FTA compliance history as part of due diligence.
What You Should Do Immediately (Action Plan)
- Assess your status
- Determine your tax period end date, filing deadline, and whether you have already registered with EmaraTax.
- Check whether your business is “taxable” or “exempt but required to register.”
- File as soon as possible
- Even if late, submit the tax return (or annual declaration) via EmaraTax.
- If this is your first period, aim to file within 7 months of the period end (if still possible) to benefit from waiver of late registration penalty.
- Pay any tax due + interest/penalties
- Settle outstanding tax liabilities promptly to limit further accrual of interest and penalties.
- Request waiver / refund (if applicable)
- If you meet the conditions, the FTA may waive or refund the AED 10,000 registration penalty.
- The FTA’s public clarification CTP006 outlines eligibility and process.
- Clean up your records & documentation
- Ensure your accounting books, invoices, contracts, ledgers, etc. are complete, accurate, and consistent with your filed return.
- Prepare to respond to any audit or information requests from the FTA.
- Engage professional advisors
- Given complexity and risk, engage a corporate tax / accounting professional (like Prabix) to help with filing, compliance, negotiation, waiver requests, and audit support.
Conclusion & Key Takeaways
- Missing the corporate tax filing / payment deadline in the UAE triggers automatic penalties (AED 500/month rising to AED 1,000/month), plus interest of 14% p.a. on the unpaid amount.
- Additional administrative penalties (e.g. for record-keeping failures, non-registration, incorrect filings, audit non-cooperation) can be significant (AED 10,000, AED 20,000, etc.).
- The FTA has introduced a waiver mechanism (for late registration penalties) for taxpayers who file their first return within 7 months of their tax period’s end. But the waiver typically applies only to the registration penalty and only for the first tax period.
- Penalties and interest accrue over time, so delaying further increases your cost substantially.
- Though penalties are not published publicly by FTA, noncompliance can harm your reputation, raise red flags in audits and business relations, and negatively affect your credibility.
- The best course is to file immediately, pay what’s due, request waiver/refund if eligible, and ensure full compliance going forward.
How Prabix Can Help If You Missed the Corporate Tax Deadline
At Prabix, we understand that adapting to the UAE’s new corporate tax regime can be overwhelming — especially with tight deadlines and complex filing requirements. Missing the September 20th deadline (or any filing deadline) doesn’t have to spell disaster.
Here’s how our team supports you:
- Penalty & Interest Review – We calculate your exposure to penalties, surcharges, and interest so you know exactly where you stand.
- Late Filing & Compliance – We guide you step by step to prepare and submit your return in EmaraTax, even if overdue.
- Waiver Requests – If you qualify for the AED 10,000 penalty waiver (for first-period registration), we help you apply and maximize the chances of approval.
- Audit-Ready Records – We review your books, invoices, and supporting documents to ensure you are ready if the FTA audits your business.
- Strategic Advice – Beyond just filing, we provide long-term compliance strategies that align your accounting systems with UAE CT, VAT, and ESR regulations.
- Confidential, Reliable Support – All your information is handled securely and with strict confidentiality.
Bottom line: Even if you’ve missed the deadline, it’s not too late to fix it. Acting quickly with the right partner minimizes financial cost and protects your business reputation.
Contact Prabix today to file your overdue corporate tax return, reduce penalties, and put your business back on track with full FTA compliance.