The UAE Federal Tax Authority (FTA) has issued a clarification regarding penalties for businesses failing to pay their corporate taxes on time. In a recent statement, the FTA confirmed that a penalty of 14% per annum will be imposed on the unpaid tax amount, calculated monthly from the day following the payment deadline.
Under Federal Decree-Law No. 47 of 2022 on Corporate Tax, which governs tax regulations and its subsequent amendments, the due date for tax payments is no later than nine months after the conclusion of the relevant tax period. The FTA emphasized that this penalty applies for every month or part of a month that the tax remains unpaid.
As part of its ongoing efforts to encourage voluntary compliance and streamline tax processes for businesses, the FTA had previously extended the deadline for businesses to file returns and settle their taxes. In Decision (7) of 2024, the deadline for businesses with tax periods ending on or before February 29th, 2024, has been extended to December 31st, 2024.
The FTA urges businesses to ensure they comply with the tax filing deadlines to avoid penalties and stay in good standing with tax regulations.
For further updates on corporate tax filing requirements, businesses are encouraged to visit the FTA’s official website or contact the authority directly.
