Federal Tax Authority
Cabinet Decision No. 129 of 2025 Amending the Administrative Penalties for Violation of Tax Laws
Major overhaul of administrative penalties across VAT, Excise Tax and Corporate Tax: replaces the compounding late-payment penalty (capped at 300%) with a flat 14% per annum rate calculated monthly, reduces voluntary-disclosure penalties to 1% per month, and lowers several fixed-amount penalties (e.g. the incorrect-return penalty cut from AED 1,000–2,000 to AED 500). Issued 9 October 2025; effective 14 April 2026.
What firms should do
Yes — review penalty exposure and voluntary disclosure strategy ahead of the 14 April 2026 effective date
- Regulator
- Federal Tax Authority
- Type
- Cabinet Decision
- Status
- Enacted
- Published
- 11 Nov 2025
- Takes effect
- 14 Apr 2026
- Reference
- Cabinet Decision No. 129 of 2025 (amends Cabinet Decision No. 40 of 2017 / No. 108 of 2021)
- Topic
- Tax Procedures
- Impact
- High
Found automatically on the regulator's website and summarised by AI by Arakan Lexara. Not legal advice; check the official source before relying on it.
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