Violations and Penalties Matrix (Cabinet Decision No. 74/2023)
Official Principle: "Standardizes all financial and administrative penalties for tax procedures across VAT, excise, and CT." — Устанавливает единую систему штрафов за налоговые нарушения по НДС, акцизам и корпоративному налогу.
📊 Regulatory Parameters & Compliance Table
| Enforcement Action | Statutory Trigger | FTA Penalty Amount | Mitigation Mechanism |
|---|---|---|---|
| Late Registration Penalty | Missing Corporate Tax deadline | AED 10,000 fixed penalty | Waiver request / EmaraTax ticket |
| Late VAT Registration | 30 days after threshold breach | AED 20,000 administrative penalty | Immediate voluntary registration |
| Tax Return Inaccuracy | Under-declared tax liability | Up to 50% + AED 1,000 fee | Voluntary Disclosure (Form 211) |
| Record Keeping Failure | Missing invoices / no IFRS audit | AED 10,000 to AED 20,000 | 7-year organized ledger archive |
✓ Mandatory Compliance Action Steps:
- Conduct pre-audit diagnostic review of tax filings and general ledger reconciliations
- Prepare Voluntary Disclosure (Form 211) immediately upon discovering accounting errors
- Ensure response to FTA Information Notices is submitted within the mandatory 5-day window
- Maintain audit-ready IFRS trial balances and verified tax invoice archives
- Engage a licensed tax agent to represent the taxable person in FTA dispute proceedings
1. Core Statutory Provision & Key Legal Rule
"Standardizes all financial and administrative penalties for tax procedures across VAT, excise, and CT."
"Устанавливает единую систему штрафов за налоговые нарушения по НДС, акцизам и корпоративному налогу."
2. Practical Application for UAE Businesses
Under the UAE federal tax framework governed by Cabinet Decision No. 74/2023, all taxable persons registered across Mainland jurisdictions and Free Zones (including Meydan, DMCC, DIFC, IFZA, DAFZA, and JAFZA) must align their accounting policies with this requirement.
- IFRS Accounting Standard: Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS or IFRS for SMEs).
- Record Retention: Primary accounting records, bank reconciliations, contracts, and tax filings must be archived for a minimum statutory period of 7 years.
- Audit Readiness: The Federal Tax Authority reserves statutory rights to request ledgers and supporting invoices during an official tax audit with a 5-day response window.
3. FTA Administrative Penalties (Cabinet Decision No. 75/2023)
Failure to register, inaccurate return filing, or violation of Cabinet Decision No. 74/2023 exposes the taxable entity to administrative fines starting from AED 10,000 up to AED 20,000 per incident, plus 1% monthly late-payment penalties.
Solution: Timely registration through the FTA EmaraTax portal and voluntary disclosure (Form 211) before an official audit notice is served.
Have Questions Regarding Violations and Penalties Matrix (Cabinet Decision No. 74/2023)?
Our licensed tax consultants and certified auditors in Meydan Free Zone, Dubai will review your contracts, calculate exact tax liability, and safeguard your company from FTA penalties.