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UAE VAT Penalty Calculator & Estimator for Dubai Businesses

Estimate your potential VAT penalties before they escalate. Our free UAE VAT penalty calculator helps Dubai SMEs understand late filing, late payment, and voluntary disclosure penalties as per FTA regulations.

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UAE VAT Penalty Types & Amounts

Understanding FTA penalties is the first step to avoiding them. Below are the current VAT penalty rates as per UAE Federal Tax Authority guidelines.

Late Registration
AED 20,000

Failing to register for VAT when mandatory threshold is exceeded

Late Filing (1st)
AED 1,000

First offense for missing VAT return deadline

Late Filing (Repeat)
AED 2,000

Repeated late filing within 24 months

Late Payment
2-4% monthly

2% immediately + 1% daily up to 300%, then 4% monthly thereafter

Incorrect Return
AED 3,000 - 50%

Filing incorrect information, up to 50% of unpaid tax

Voluntary Disclosure
5% of tax

Self-reporting errors before FTA audit (reduced penalty)

How VAT Late Payment Penalties Are Calculated

The FTA's late payment penalty structure is progressive and can escalate quickly. Here's the breakdown:

Day 1: 2% Immediate Penalty

2% of unpaid tax applied on the first day after the due date

Days 2-30: 1% Daily

1% daily penalty up to 300% of the daily penalty amount

Month 2+: 4% Monthly

4% monthly on the unpaid tax, compounding indefinitely

Example Calculation
AED 50,000 unpaid VAT, 45 days late
Day 1 (2%)AED 1,000
Days 2-30 (1% × 29)AED 14,500
Month 2 (4%)AED 2,000
Total PenaltyAED 17,500

* Simplified example. Actual penalties may vary based on FTA calculation methods.

Reduce Penalties by 90%

Voluntary Disclosure: Your Best Defense

Made an error on your VAT return? Filing a Voluntary Disclosure before an FTA audit can reduce your penalty from up to 50% of unpaid tax down to just 5%. Our team has successfully filed hundreds of voluntary disclosures for Dubai businesses.

  • Penalty reduced to 5% of underpaid tax
  • No audit trigger if filed proactively
  • Demonstrates good faith compliance
  • We handle the entire FTA submission
Learn About Penalty Waiver

Voluntary Disclosure Comparison

Found in FTA Audit50%

AED 100,000 error = AED 50,000 penalty

Voluntary Disclosure5%

AED 100,000 error = AED 5,000 penalty

Save AED 45,000 by disclosing first

5 Steps to Avoid VAT Penalties in UAE

Prevention is always better than cure. Follow these steps to stay compliant with FTA requirements.

1

Register on Time

Register within 30 days of exceeding AED 375,000 threshold

2

File Returns Early

Don't wait until the 28th—file by the 20th to catch errors

3

Pay Immediately

Pay VAT due on submission, not on the deadline

4

Keep Records

Maintain 5 years of records for FTA audits

5

Review Quarterly

Have a tax consultant review your VAT position quarterly

Download: VAT Penalty Prevention Checklist

Get our free 15-point checklist to ensure you never face FTA penalties. Includes filing deadlines, document requirements, and common mistakes to avoid.

  • Monthly compliance checklist
  • FTA deadline calendar 2024-2025
  • Common errors to avoid

Get Your Free Checklist

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Related VAT Services

VAT Registration & Filing
Complete VAT services from registration to monthly returns
Penalty Waiver Services
Expert assistance with FTA penalty reduction and waivers
Corporate Tax Services
Navigate UAE's new Corporate Tax with confidence

VAT Penalty FAQs

Common questions about VAT penalties in UAE

Facing a VAT Penalty?

Don't let penalties escalate. Our tax experts can help you file voluntary disclosures, apply for waivers, and get compliant fast.

Serving SMEs across Dubai, Abu Dhabi, Sharjah & all UAE Emirates