Received a tax assessment, a penalty notice, or an unexpected query from the Federal Tax Authority? The way you respond in the first few days matters. Jitendra Chartered Accountants helps UAE businesses understand their UAE Tax Evasion Penalties exposure before they respond to the FTA, so decisions are made from knowledge, not guesswork.
When You Might Need Us
We regularly help businesses dealing with:
- FTA tax assessment notices
- Late or incorrect VAT or Corporate Tax filings
- Errors discovered in past tax returns
- Incomplete or inconsistent tax records
- Undeclared transactions or income
- An ongoing or upcoming FTA tax audit
- Uncertainty about whether a past mistake could count as evasion
If any of this applies to you, speak to a Jitendra Chartered Accountants tax adviser before deciding what to do next.
Tax Evasion vs a Genuine Mistake
Tax evasion is covered under Federal Decree-Law No. 28 of 2022 on Tax Procedures and its Executive Regulation, Cabinet Decision No. 74 of 2023.
Under Article 25, evasion generally means a deliberate act, such as:
- Hiding, destroying, or falsifying tax records
- Knowingly understating revenue or tax due
- Submitting false information to the FTA
- Obstructing FTA officers carrying out their duties
Where this applies, the law allows for imprisonment, a financial penalty, or both, in addition to the tax owed.
This is different from an honest error. Late filings and incorrect returns are usually treated as administrative penalties instead, which apply regardless of intent. An inadvertent mistake is not automatically evasion, but that distinction needs proper review, not assumption.
Speak to Jitendra Chartered Accountants before you respond to the FTA.
UAE Tax Penalties – The Current Amounts
Common administrative penalties currently in force include:
- Late VAT registration: AED 10,000
- Late Corporate Tax registration: AED 10,000
- Late VAT return filing: AED 1,000 (first offence), AED 2,000 (repeat within 24 months)
- Late Corporate Tax return filing: AED 500 per month for the first 12 months, then AED 1,000 per month
- Incorrect VAT return: AED 500 per error (may be waived if corrected before the deadline or via voluntary disclosure)
- Late payment of tax: 14% per annum, calculated monthly on the unpaid amount
Where deliberate tax evasion under Article 25 is established, the law provides for imprisonment, a financial penalty, or both, on top of the tax owed. The exact financial penalty in evasion cases depends on the specific facts and is not a fixed published figure, so it should always be confirmed against your circumstances rather than assumed.
These figures reflect the current framework, but penalty rules are updated periodically. We’ll confirm the applicable figures for your exact situation during your consultation.
Administrative Penalty or Criminal Matter?
This distinction changes how you should respond:
Administrative penalty: usually resolved through correction, payment, or a formal review request
Potential evasion issue: needs careful legal and financial review before any contact with the FTA
We’ll tell you clearly which one you’re dealing with.
How We Help
Jitendra Chartered Accountants supports you through the full process:
- Tax penalty and exposure assessment
- Review of tax assessments issued by the FTA
- VAT and Corporate Tax compliance review
- Documentation and record review
- Voluntary disclosure assessment and preparation
- Tax audit support
- FTA correspondence and response support
- Remediation planning to prevent recurrence
We won’t promise a specific outcome with the FTA. No honest adviser can. What we will give you is clarity on your position and your options.
What to Do Right Now
If you’ve spotted a potential issue:
- Gather your records for the relevant tax periods
- Identify what may have gone wrong and when
- Get a professional assessment before submitting anything to the FTA
- Decide on the right route with your adviser, correction, disclosure, or formal response
- Act on that plan, not on guesswork
Talk to us before you take any of these steps yourself.
Based in Dubai?
The same federal law applies across the UAE, including Dubai. There’s no separate Dubai-specific regime. What matters is having an adviser who understands how these rules play out in practice for busy, complex businesses. If you’re in Dubai and concerned about a tax penalty or audit, get in touch.
Why Jitendra Chartered Accountants
- We are experts in UAE tax legislation
- Every case is assessed on its own facts, not a template
- Sensitive tax matters are handled in strict confidence
- Direct support with FTA correspondence and audits
- Practical, proactive advice aimed at preventing repeat issues
Speak to an Adviser
Don’t wait for the FTA to make the first move. Get a confidential assessment from Jitendra Chartered Accountants and find out exactly where you stand.
Tax Consultancy Services
FAQs
What counts as tax evasion versus a simple mistake?
Evasion requires deliberate conduct intended to reduce tax owed. An honest filing error is treated as an administrative matter instead.
Can I go to prison for tax evasion in the UAE?
Under Article 25, imprisonment is possible for deliberate evasion. Whether it applies depends entirely on your facts.
What is the penalty for late VAT registration?
AED 10,000, in addition to any VAT owed from the date registration should have taken place.
Should I do a voluntary disclosure?
Only after a proper assessment confirms it’s the right route for your situation.
Can a tax penalty be challenged?
Yes, a formal reconsideration request can usually be submitted within a set window after the penalty notice, followed by an appeal route if rejected.
I found an old error in my records. What now?
Don’t act yet. Gather your records and speak to us first.
