Key takeaways
- The administrative penalty for failing to submit a UAE VAT registration application on time is a fixed AED 10,000, set in Table No. 1, item 3 of Cabinet Decision No. 40 of 2017 as amended (Ministry of Finance consolidated text, November 2025).
- A UAE business must register for VAT once its taxable supplies and imports exceed AED 375,000, and the Federal Tax Authority (FTA) also applies this threshold on a forward-looking basis: if you expect to cross it within the next 30 days, you must apply.
- The AED 10,000 penalty does not replace the VAT itself: under Article 3 of Cabinet Decision No. 40 of 2017, paying a penalty does not relieve a taxable person of paying the tax due.
- A late registrant can ask the FTA to waive or reduce a penalty through EmaraTax, but waiver cases are decided one by one by a committee and the FTA's published timeline for a response is up to 110 business days.
- Cabinet Decision No. 129 of 2025 revised several UAE tax penalties from 14 April 2026, so any article quoting older penalty tables for late payment should be treated with caution.
What is the penalty for late VAT registration in the UAE?
The penalty is AED 10,000, charged once for failing to submit a VAT registration application within the timeframe set by the VAT law. It sits in Table No. 1 (Tax Procedures Law violations) of Cabinet Decision No. 40 of 2017, not in the VAT-specific Table No. 3, which is why many guides miss it.
These are the related amounts in the Ministry of Finance consolidated text, as of November 2025:
| Violation | Penalty | Table and item |
|---|---|---|
| Failing to submit a registration application on time | AED 10,000 | Table No. 1, item 3 |
| Failing to tell the FTA about a change that requires updating your tax record | AED 1,000 per violation; AED 5,000 for a repeat within 24 months | Table No. 1, item 5 |
| Failing to submit a deregistration application on time | AED 1,000, then AED 1,000 monthly on the same date, up to AED 10,000 | Table No. 1, item 4 |
| Failing to issue a tax invoice or tax credit note | AED 2,500 per detected case | Table No. 3, items 4 and 5 |
Source for the table: Cabinet Decision No. 40 of 2017 and its amendments, consolidated by the Ministry of Finance.
AED 10,000: fixed administrative penalty for failing to submit a VAT registration application within the legal timeframe. Source: Cabinet Decision No. 40 of 2017 as amended, Table No. 1, item 3 (Ministry of Finance consolidated text), checked 06 November 2026.
When does a business have to register for VAT in the UAE?
Registration is mandatory once a business's taxable supplies and imports pass AED 375,000, and it is optional from AED 187,500 in taxable supplies and imports or taxable expenses. The mandatory threshold does not apply to foreign businesses, according to the FTA's registration page, as of November 2026.
The FTA's wording also looks forward: a business must register if it expects its taxable supplies and imports to exceed the mandatory threshold within the next 30 days. The VAT Executive Regulation also contains a look-back test based on past turnover, so check Article 95 of Cabinet Decision No. 52 of 2017 for the exact trigger date that applies to your invoicing pattern.
| Threshold | Amount | What it triggers |
|---|---|---|
| Mandatory registration | AED 375,000 in taxable supplies and imports | You must apply to the FTA |
| Voluntary registration | AED 187,500 in taxable supplies and imports, or taxable expenses | You may apply |
Source: FTA, Registration for VAT, checked 06 November 2026.
Does the late registration penalty cancel the VAT I owe?
No. The AED 10,000 is a penalty for the registration failure; the VAT on your taxable supplies is a separate liability. Article 3 of Cabinet Decision No. 40 of 2017 says a penalty does not relieve the taxable person of paying the tax due.
Say a SHAMS trading company bills AED 4m a year and is found to have crossed the threshold six months earlier: this is a hypothetical, but the arithmetic is simple. If its invoices carried no VAT, the company may have to account for 5% VAT on those sales out of its own margin, because collecting it from customers after the fact is rarely possible. The penalty is the smaller number; the unrecovered tax is the bigger one. The period for which tax is due depends on the effective date of registration the FTA sets.
How do I register for VAT on EmaraTax?
You register through the FTA's EmaraTax portal, and access to FTA services requires a UAE Pass account.
- Create or confirm your UAE Pass account.
- Log in to EmaraTax and create the taxable person profile for your company.
- Open the VAT registration application and complete the business and turnover details.
- Upload the supporting documents the form asks for.
- Submit, and answer any FTA clarification request promptly.
Can the FTA waive or reduce the late registration penalty?
Yes, the FTA has a penalty waiver service, but it is discretionary and slow. You apply in EmaraTax under the penalty waiver request, attach an undertaking that the violation has been corrected and will not be repeated, and wait: the FTA states it may take up to 110 business days from receipt of a complete application to respond.
The FTA's service page points to Articles 3 and 4 of Cabinet Decision No. 105 of 2021 for the eligibility rules. As summarised from that decision, the violation must not involve tax evasion and must fall within a listed case, such as the illness or death of the owner, a government restriction or an FTA system failure; the committee sets any reduction at its discretion.
If you disagree with a penalty decision itself, a different route exists. A reconsideration request must be filed through EmaraTax within 40 business days of the original FTA decision, and the FTA has up to 45 business days to respond.
| Route | Use it when | Deadline or timeline |
|---|---|---|
| Penalty waiver request | You accept the violation but have grounds for relief | FTA response within up to 110 business days |
| Reconsideration request | You challenge the FTA decision itself | File within 40 business days; FTA responds within up to 45 business days |
Sources: FTA, penalty waiver service and FTA, reconsideration request, checked 06 November 2026.
What changed in UAE tax penalties in 2026?
Cabinet Decision No. 129 of 2025 amended Tables No. 1 and No. 3 of Cabinet Decision No. 40 of 2017 with effect from 14 April 2026. The best-known change is late payment, now a monthly penalty at 14% per annum on unpaid payable tax, counted from the day after the due date.
The AED 10,000 late registration amount appears in the consolidated text published after that amendment. If your deadline fell before 14 April 2026, check which version of the tables applies.
What most guides don't tell you
The penalty is easier to avoid than to remove. Waiver cases take months and depend on a committee's view of your reasons. A business with a large contract on the horizon should treat the forward-looking 30-day test as the real deadline.
Registering late also hits your customers. Invoices issued before registration without VAT cannot simply be corrected later, because the customer never agreed to pay it. This is reasoning from the rules rather than a published FTA position, but it is the main reason late registrants end up absorbing tax from their own margin.
Small errors after registration add up. Failing to report a change in your details costs AED 1,000 for each violation and AED 5,000 for a repeat within 24 months.
If you'd rather not track these dates by hand, the free UAE compliance calendar is a calendar of your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
What is the VAT registration threshold in the UAE?
The mandatory threshold is AED 375,000 in taxable supplies and imports, as of November 2026 on the FTA's registration page. The FTA also requires registration if you expect to exceed it within the next 30 days.
Can I register for VAT voluntarily?
Yes, if your taxable supplies and imports, or your taxable expenses, exceed AED 187,500. The FTA also lets a business below the mandatory threshold apply if it expects to exceed the voluntary threshold within the next 30 days.
Should I register for VAT voluntarily if I'm below the threshold?
It depends on whether you pay significant VAT on costs and your customers can recover VAT you would charge. Registering also brings filing duties and penalties, so weigh those against the VAT you could recover.
What is the penalty for filing a VAT return late?
The Ministry of Finance consolidated text of Cabinet Decision No. 40 of 2017 lists AED 1,000 for a first late return and AED 2,000 for a repeat within 24 months. Confirm the current amount in the decision before relying on it, because the tables were amended from 14 April 2026.
What is the penalty for late VAT payment?
Under the amended tables, unpaid payable tax attracts a penalty of 14% per annum, calculated monthly from the day after the due date. Each month or part of a month counts.
Which deadlines apply to your company?
VAT registration is one of several dates a UAE company has to meet each year. The free UAE compliance calendar lists the deadlines for your company.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Cabinet Decision No. 40 of 2017 and its amendments (consolidated, 14 November 2025), Ministry of Finance
- Registration for VAT, Federal Tax Authority
- Requests for instalment, waiver and refund of administrative penalties, Federal Tax Authority
- Reconsideration request, Federal Tax Authority
Last checked: 06 November 2026
This is general information, not tax or legal advice for your specific situation.