In 2025, the UAE’s Federal Tax Authority (FTA) introduced revised penalties for non-compliance with VAT and Corporate Tax regulations. These updates are essential for all UAE-based businesses to understand and act on — or risk facing steep financial penalties.
Here’s a clear breakdown of the latest penalty structure and how your business can stay compliant:
Key FTA Penalties Introduced in 2025
| Penalty Type | Amount (AED) | Trigger Condition |
| Late Corporate Tax Registration | 10,000 | If registration is not done within the time frame |
| Failure to File VAT Returns | 1,000 per return | Even if NIL return |
| Understating Tax Payable | 50% of underpaid tax | If discovered via audit |
| Late Payment of Tax | 2% per month | Accrued until full payment |
How to Avoid These Penalties
- Register for Corporate Tax before due dates
- File VAT & CT returns on time (even if NIL)
- Maintain accurate and updated accounting records
- Work with a registered tax agent like Lynnx Auditors
Learn more about our Corporate Tax Services to stay Compliant
Refer to the official Federal Tax Authority website for complete penalty details.
Stay Compliant, Stay Stress-Free
Penalties can harm both your finances and reputation. Regular reviews of your VAT and corporate tax filings, supported by a knowledgeable tax agent, can save you from unnecessary losses. Businesses should also consider scheduling internal audits or compliance checks at least once a year.
At Lynnx Auditors, we provide expert support on tax registration, VAT filing, corporate tax filing, and full accounting services. Let our team help you stay 100% compliant in 2025 and beyond.
