The UAE Federal Tax Authority (FTA) has provided clear details about the penalties businesses will face if they fail to pay their corporate taxes on time. According to the FTA, businesses that don’t pay their tax by the deadline will be charged a penalty of 14% per year, which is calculated each month from the day after the payment deadline.
This penalty is based on the unpaid tax amount and will keep increasing each month the tax remains unpaid. The FTA also explained that the deadline for paying taxes is no later than nine months after the end of the tax period. This is in line with the Federal Decree-Law No. 47 of 2022 on Corporate Tax, along with its amendments.
In an effort to make the tax process easier for businesses, the FTA had earlier extended the deadline for tax filings. Under Decision (7) of 2024, businesses with tax periods ending on or before February 29th, 2024, have until December 31st, 2024, to file their returns and pay their taxes.
The FTA is encouraging businesses to meet these deadlines to avoid penalties and stay compliant with the law.
