What are the penalties for late VAT filing or payment in the UAE?
Penalties include AED 1,000 for late registration, AED 500 for late filing (first offense), and 2% of unpaid tax immediately plus 4% monthly for late payments, capped at 300% of the tax due.
The UAE imposes various penalties for VAT non-compliance to ensure timely registration, filing, and payment.
Registration Penalties
- AED 1,000 for late registration
- Additional penalties for continued non-compliance
- Potential business license issues
Filing Penalties
- AED 500 for late filing (first offense)
- AED 1,000 for subsequent late filings
- Penalties apply even if no VAT is due
- Additional penalties for non-filing
Payment Penalties
- 2% of unpaid tax applied immediately
- Additional 4% per month for continued non-payment
- Maximum penalty: 300% of the tax due
- Interest calculated on daily basis
Other Penalties
- Record-keeping violations: Up to AED 50,000
- Incorrect VAT invoices: Up to AED 15,000
- Obstruction of tax audits: Up to AED 50,000
- Tax evasion: Up to AED 50,000 plus potential criminal charges
