Dubai: The Federal Tax Authority (FTA) has announced the entry into force of Cabinet Decision No. (129) of 2025, amending certain provisions of Cabinet Decision No. (40) of 2017 concerning administrative penalties for violations of tax laws in the UAE. This decision took effect on Tuesday, 14th April 2026.
According to Emirates News Agency, the FTA stated that these amendments are designed to support taxpayers, reduce financial burdens, and help them fulfill tax obligations while regularizing their positions. The initiative also aims to enhance the UAE's competitiveness and ease of doing business. The changes are said to introduce further facilitations for entities registered for Value Added Tax (VAT) and Excise Tax, encouraging voluntary compliance, timely updates of tax records, and correction of errors.
Abdulaziz Mohammed Al Mulla, FTA Director-General, explained that the amendments include reductions in several administrative penalties, aligning with the leadership's directives to implement a tax system based on international best practices. He emphasized that these measures are intended to support economic growth, enhance transparency, and ensure a flexible legislative framework that keeps pace with evolving requirements.
Al Mulla urged tax registrants to leverage the revised provisions to correct violations and benefit from reduced penalties, thereby enabling businesses to strengthen their role in supporting the UAE's position as a global financial and economic hub. He continued to express that the amendments support taxable persons in achieving voluntary compliance and rectifying their positions. They also encourage registrants to notify the authority of any cases that may require amendments to the information contained in their tax records and prompt submission of voluntary disclosures without exposure to significant financial penalties.
The FTA highlighted that, under the new decision amending certain provisions of the Cabinet Decision, many types of administrative penalties have been reduced or had their calculation mechanisms amended. The reductions cover numerous administrative violations related to the application of the Federal Decree-Law on Tax Procedures, the Federal Decree-Law on Excise Tax, and the Federal Decree-Law on Value Added Tax.
The authority explained that, under these amendments, the administrative penalty for failing to submit data, records, and tax-related documents in Arabic when requested has been reduced from AED20,000 to AED5,000. Similarly, the penalty for a registrant's failure to notify the authority of any case that may require amendment of the information in its tax record has been altered. Initially set at AED5,000 for the first instance and AED10,000 for repetition, it has been changed to AED1,000 for each violation, and AED5,000 in the event of repetition of the same violation within 24 months from the date of the last violation.
Additionally, the penalty for a legal representative of a taxable person failing to notify the authority of his appointment within the prescribed time limits has been reduced from AED10,000 to AED1,000, with penalties payable from the legal representative's own funds.
The FTA also noted that the amendments extend to administrative penalties related to other violations, including failure by a taxable person to pay the payable tax within the time limits, submission of incorrect tax returns, and issues concerning voluntary disclosures related to errors in tax returns, tax assessments, or tax refund applications.