The UAE tax framework has evolved significantly since the introduction of Excise Tax (2017), VAT (2018), and most recently Corporate Tax (2023). To ensure compliance and efficient tax administration, the UAE Cabinet issued Cabinet Decision No. 40 of 2017, which sets out the system of Administrative Penalties for violations of the Tax Procedures Law and relevant tax laws.
Since 2017, several amendments have been issued to refine the penalty system:
- Cabinet Decision No. 49 of 2021 (effective 28 June 2021)
- Cabinet Decision No. 108 of 2021 (effective 1 January 2022)
- Cabinet Decision No. 129 of 2025 (effective 14 April 2026)
This article offers a comprehensive overview of the UAE’s administrative penalty framework and outlines all amendments introduced under Cabinet Decision No. 129 of 2025, effective from 14 April 2026.
Overview of the Administrative Penalty System
Administrative penalties apply when a taxpayer fails to comply with obligations relating to:
- Registration
- Deregistration
- Record-keeping
- Filing of returns
- Payment of tax
- Submission of Voluntary Disclosures
- Cooperation during Tax Audits
- Issuance of tax invoices / credit notes
The penalty tables are divided as follows:
- Table 1 – Violations under the Tax Procedures Law
- Table 2 – Violations under the Excise Tax Law
- Table 3 – Violations under the Value Added Tax Law
Table 1 has been significantly amended under Cabinet Decision No. 129 of 2025.
Amendments Introduced Under Cabinet Decision No. 129 of 2025
Table 1 – Violations & Administrative Penalties Under the Tax Procedures Law
Conclusion
The latest amendments introduced under Cabinet Decision No. 129 of 2025 reflect the UAE’s commitment to maintaining a modern, fair, and transparent tax administration system. The redesigned penalty framework is more balanced, less punitive, and significantly easier for taxpayers to understand and comply with.
While Tables 1 was updated to improve clarity and enforcement consistency, the UAE has wisely chosen to keep the Excise Tax Penalties (Table 2) and VAT Penalties (Table 3) unchanged.
As the new penalties come into effect from 14 April 2026, businesses should re-evaluate their tax processes, strengthen their internal controls, and ensure timely compliance to avoid unnecessary financial exposure.
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