UAE VAT Voluntary Disclosure: When to File, Deadline, Penalties

When a UAE VAT error needs a voluntary disclosure: the AED 10,000 threshold, the 20 business day deadline and the 1% monthly penalty, with FTA sources.

11 November 2026Qawi6 min read

Key takeaways

A UAE VAT voluntary disclosure is mandatory when an error in a filed VAT return understated the tax payable by more than AED 10,000; the taxable person must submit it to the Federal Tax Authority (FTA) within 20 business days of becoming aware of the error (Cabinet Decision No. 74 of 2023, Article 10).
A UAE VAT error of AED 10,000 or less is normally corrected in a VAT return instead: either one not yet due for a previous period or the return for the period in which the error was found, whichever comes first; a voluntary disclosure is the fallback only when no such return exists.
The FTA charges a monthly penalty of 1% of the tax difference on a VAT voluntary disclosure, counted from the day after the original return's due date until the disclosure is submitted (Cabinet Decision No. 40 of 2017, Table 1, item 11, as amended with effect from 14 April 2026).
A UAE taxpayer who has not disclosed before the FTA notifies an audit faces an extra fixed penalty of 15% of the tax difference, on top of the 1% monthly penalty.
Tax that a VAT voluntary disclosure shows as unpaid is due 20 business days after the disclosure is submitted; after that date, a late payment penalty of 14% per annum applies.

When do I have to file a VAT voluntary disclosure in the UAE?

You must file a voluntary disclosure when a VAT return you've already submitted understated the tax you owed by more than AED 10,000. The rule sits in Article 10 of Cabinet Decision No. 74 of 2023, the executive regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures.

The treatment depends on the size of the error and on whether you can still fix it inside a return:

Situation	What the regulation requires	Deadline
Error understates payable tax by more than AED 10,000	Submit a voluntary disclosure to the FTA	20 business days from the date you became aware of the error
Error of AED 10,000 or less, and a VAT return is available to correct it	Correct it in a return not yet due for a previous period, or in the return for the period in which you found it, whichever is earlier	Within that return
Error of AED 10,000 or less, and no return can correct it	Submit a voluntary disclosure	20 business days from the date you became aware of the error
Error or omission that causes no difference in tax due	Correct the error, or submit a voluntary disclosure, as the FTA specifies	Not stated in the article

Source: Cabinet Decision No. 74 of 2023, Article 10, checked 11 November 2026.

How long do I have to submit a VAT voluntary disclosure?

You have 20 business days from the date you became aware of the error, not from the date of the original return. Article 10(1)(a) of Cabinet Decision No. 74 of 2023 ties the clock to your own awareness, so the date you found the mistake matters.

In practice that means writing down when and how the error surfaced, for example the date a reconciliation, an auditor's query or a client's credit note exposed it. The regulation doesn't say how awareness is proven, so a dated internal note is a sensible record, not a legal requirement.

What penalties apply to a VAT voluntary disclosure?

The FTA charges 1% of the tax difference for each month or part of a month, starting the day after the original return's due date and ending when you submit the disclosure. Two further penalties can apply, depending on timing and payment.

Situation	Penalty	Source
Voluntary disclosure of an error in a return	1% of the tax difference per month or part thereof, from the day after the return's due date until the disclosure is submitted	Cabinet Decision No. 40 of 2017, Table 1, item 11
No disclosure before the FTA notifies you of an audit	A fixed 15% of the tax difference, plus 1% per month (to the date of a late disclosure, or to the date the tax assessment is issued if you never disclose)	Table 1, item 12
Tax due from the disclosure not paid on time	14% per annum, applied monthly on the unpaid amount, from the day after the due date; the due date is 20 business days from submission of the disclosure	Table 1, item 9
Incorrect return, where the error is not corrected within the return deadline and no disclosure is filed	AED 500	Table 1, item 10

Penalty table accurate as of 11 November 2026. The table was amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026.

Here's a hypothetical to show the arithmetic. Say a SHAMS trading company under-declared AED 50,000 of output VAT and files a voluntary disclosure during the third month after the return's due date, before any audit notice. The monthly penalty is 1% of AED 50,000 for three months (the "month or part thereof" rule counts a started month as a full one), so AED 1,500, plus the AED 50,000 itself. Had the FTA notified an audit first, a fixed 15% (AED 7,500) would be added, and the monthly 1% would still run.

How do I file a VAT voluntary disclosure on EmaraTax?

You file it through your EmaraTax account, using the form the FTA prepares for the purpose. Cabinet Decision No. 74 of 2023, Article 10(4), says the disclosure must be submitted "in the form and manner specified by the Authority."

The sequence is:

Work out the correct figures for the period concerned and the difference from what you filed; the penalty runs on that tax difference.
Log in to EmaraTax and open your VAT account for the registration concerned.
Start a VAT voluntary disclosure for the affected return period (the FTA publishes a user guide titled "Submit VAT Voluntary Disclosure by VAT Registrant" on tax.gov.ae; follow its screens, as portal layouts change).
Enter the corrected figures with the reason for the change, then review the calculated tax difference.
Submit the disclosure within the 20 business day window, then pay any tax due within 20 business days of submission.

If you'd rather not track these dates by hand, the free UAE compliance calendar lists your company's VAT and other deadlines, personalised from a few questions, as a PDF and calendar file.

AED 10,000: the amount of understated VAT above which a voluntary disclosure is mandatory within 20 business days. Source: Cabinet Decision No. 74 of 2023, Article 10(1), checked 11 November 2026.

What happens if the FTA finds the error before I disclose?

If the FTA notifies you of a tax audit before you disclose, a fixed 15% penalty on the tax difference applies in addition to the 1% monthly penalty. A disclosure filed after that notice stops the monthly penalty at the submission date but does not remove the 15%.

Under Cabinet Decision No. 74 of 2023, the FTA must give at least 10 business days' notice before a tax audit, and you must answer information requests within the period and in the form stated in the notification. The regulation also gives you 20 business days from notification of the audit results to respond. A disclosure filed before the notice is the cheaper route.

What most guides don't tell you

The monthly penalty starts at the original due date, not at discovery. Item 11 runs the 1% from the day after the return was due, so every month you take to spot an error costs 1% of the difference even though the 20 business day deadline hasn't started. Monthly reconciliation of the VAT control account to the return is the cheapest control you have.
An error with no tax difference can still cost AED 500. Item 10 charges AED 500 for an incorrect return unless you correct it within the return deadline or file a voluntary disclosure for an error that changes no tax. A wrong box or period is not automatically harmless.
The AED 10,000 threshold is written for understated tax. Article 10(1) covers returns that understate payable tax. How an overpayment is corrected is not addressed in the clause, so check the FTA's voluntary disclosure guide or take advice before assuming the same threshold logic applies.
A disclosure creates its own payment deadline. The tax shown in the disclosure is due 20 business days after you submit it, and unpaid amounts then attract 14% per annum, so file only when you can fund the payment or have a plan to.

Which VAT deadlines apply to your company?

A voluntary disclosure is easier to avoid when return dates and reconciliations are on a calendar your team actually sees. The free UAE compliance calendar lists your company's VAT and other UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.

Frequently asked questions

How do I correct a mistake on a previous VAT return? If the mistake understated your payable VAT by more than AED 10,000, file a voluntary disclosure with the FTA within 20 business days of becoming aware of it. If it was AED 10,000 or less, correct it in a return that has not yet become due or in the return for the period in which you found it, whichever is earlier.

What is the 5-year record keeping rule for VAT? Cabinet Decision No. 74 of 2023, Article 3, requires a taxable person to keep records for five years following the tax period to which they relate. The regulation also sets longer retention in certain cases, including disputes, audits and voluntary disclosures, so read Article 3 before disposing of old files.

What happens during an FTA VAT audit? The FTA must notify you at least 10 business days before a tax audit and will ask for documents within the period stated in its notification. You then have 20 business days from notification of the audit results to respond.

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

Last checked: 11 November 2026

This is general information, not tax or legal advice for your specific situation.