Reviewed 12 September 2026. General guidance; confirm the requirements for your business with the relevant authority.
Cabinet Decision 129 of 2025 took effect on 14 April 2026 and amended parts of the administrative penalty framework in Cabinet Decision 40 of 2017. The FTA’s announcement focuses on Tax Procedures, VAT and Excise Tax. Businesses should check the rule for the particular tax and violation instead of treating every UAE penalty as one interchangeable calculation.
What the FTA confirmed
The amendments reduce some administrative penalties and revise other calculation mechanisms. The FTA highlighted changes concerning requested Arabic records, updates to tax registration information and notification of a legal representative’s appointment. It also identified changes affecting late payment, incorrect returns and voluntary disclosures.
Examples in the announcement include a reduction from AED 20,000 to AED 5,000 for failing to provide requested tax records in Arabic, and revised penalties for failing to notify the FTA of required tax-record changes. The exact violation, timing and repeat-offence conditions still matter. A lower amount in one category does not mean an existing assessment in another category is automatically cancelled.
Review the notice before calculating exposure
Start with the tax type, affected period, due date, amount unpaid, assessment date and the legal basis stated in the notice. Check whether the issue is late registration, late filing, late payment, an incorrect return or a failure to provide information. More than one obligation may be involved.
Avoid comparing a historical maximum penalty cap with a new annual percentage as if the cap were automatically charged after one year. That produces a misleading result. A proper calculation should show each applicable period and component and explain any transitional treatment. Obtain a case-specific review where the notice spans the change in rules.
Organise corrections and disclosures carefully
When an error is found, identify the original transaction and the return or record affected. Preserve the source documents, reconcile the proposed correction to the ledger and establish the appropriate FTA procedure. A tax-record amendment, a corrected return, a voluntary disclosure and a challenge to an assessment are different actions.
Do not wait for the next licence renewal to update a tax record. Assign responsibility for changes to the company name, contact information, activities and authorised representatives. Keep the authority acknowledgement with the document that triggered the amendment.
A practical response file
- The original FTA notice and all response deadlines.
- The return, assessment or registration record involved.
- Relevant invoices, contracts, accounting entries and payment evidence.
- A dated explanation of the error or event and when it was discovered.
- The proposed action, its legal basis and the person authorised to approve it.
- Copies of submissions, authority replies and any resulting account movements.
The aim is to make the facts clear and the next action traceable. Do not submit several conflicting explanations through different people. Agree one owner for the matter and maintain a single record of correspondence.
Questions businesses ask
Does this decision erase Corporate Tax registration penalties?
Do not assume that. The first-period Corporate Tax late-registration waiver is a separate initiative with its own conditions. See MNK’s guide to Corporate Tax deadlines and the FTA waiver source below.
Should we stop paying while a review is underway?
A review does not itself suspend a payment or response obligation. Check the applicable procedure and the notice before deciding how to act.
Can MNK help review an issue?
MNK can help organise the documents and coordinate the appropriate tax support. Authority decisions and relief requests remain subject to the applicable rules and the FTA’s assessment.
Official sources and further reading
Explore MNK’s related business service or request a consultation with your activity, jurisdiction and the support you need.