Missed the UAE Corporate Tax Return Filing Deadline? Penalties and What to Do Next

Four different things get called “the Corporate Tax deadline”, and they carry different penalties. This article is about one of them: filing the return late. Late registration and late payment are separate violations, dealt with separately below.

What late filing costs, and how it grows

Under Cabinet Decision No. 75 of 2023, failure to submit the Corporate Tax return on time attracts AED 500 for each month, or part of a month, for the first twelve months, and AED 1,000 for each month, or part of a month, from the thirteenth month onwards. It starts the day after the deadline.

Note the phrase “or part of a month”. A return three days late attracts the same AED 500 as one a month late. The cost of waiting is arithmetic, not judgement.

File first, correct second

The filing penalty stops accruing when the return is filed. It does not pause while you assemble a perfect return. In most cases the cheaper course is to file on the best information you have and correct afterwards, rather than hold the return back for figures that are still being agreed.

Four things that are not the same

These are legally distinct events and should never be collapsed into a single discussion about “the late Corporate Tax penalty”:

• Late registration — a separate fixed penalty, with its own conditions.
• Late return filing — the AED 500 / AED 1,000 monthly penalty described above.
• Late payment of tax — calculated at 14% per annum on the unpaid amount, applied monthly or part thereof.
• Correcting a return already filed — a voluntary disclosure, with its own procedure and its own consequences.

Filing and paying are separate obligations with separate penalties. If you cannot pay, file anyway: it stops the larger of the two clocks.

What to do this week

1. Establish which obligation you have actually missed — registration, filing, payment, or a figure in a return already filed.
2. Calculate the penalty accrued to date, so the cost of further delay is visible.
3. File the outstanding return on the best available information.
4. Settle the tax, or agree how it will be settled, to stop the 14% accruing.
5. Deal with any correction separately, through the right procedure.

If you are behind on a return, our Tax Advisory team can establish your position and file quickly, which is usually the cheapest thing you can do this week.

Frequently asked questions

How much is the penalty for filing a Corporate Tax return late?
AED 500 for each month or part month for the first 12 months, then AED 1,000 per month from month 13.

When does the penalty start?
The day after the filing deadline.

Is late payment the same penalty?
No. Late payment of tax is calculated at 14% per annum on the unpaid amount, applied monthly or part thereof.

Should we file if we cannot pay?
Yes. Filing and payment are separate obligations with separate penalties.

Does filing late stop the penalty?
Filing stops the filing penalty accruing. Any unpaid tax continues to attract the late payment penalty.