Cabinet Decision No. 129 of 2025 Amending the Administrative Penalties for Violation of Tax Laws

Major overhaul of administrative penalties across VAT, Excise Tax and Corporate Tax: replaces the compounding late-payment penalty (capped at 300%) with a flat 14% per annum rate calculated monthly, reduces voluntary-disclosure penalties to 1% per month, and lowers several fixed-amount penalties (e.g. the incorrect-return penalty cut from AED 1,000–2,000 to AED 500). Issued 9 October 2025; effective 14 April 2026.

What firms should do

Yes — review penalty exposure and voluntary disclosure strategy ahead of the 14 April 2026 effective date

Regulator: Federal Tax Authority
Type: Cabinet Decision
Status: Enacted
Published: 11 Nov 2025
Takes effect: 14 Apr 2026
Reference: Cabinet Decision No. 129 of 2025 (amends Cabinet Decision No. 40 of 2017 / No. 108 of 2021)
Topic: Tax Procedures
Impact: High

Read it on the regulator's website

Found automatically on the regulator's website and summarised by AI by Arakan Lexara. Not legal advice; check the official source before relying on it.

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