• Oct 27, 26
• dawnuser
• Corporate Tax
• 0 comment

The filing deadline for companies with a 31 December 2025 financial year end passed on 30 September 2026. If your return is still outstanding, the position gets more expensive each month, but it is fixable and the sooner it is dealt with the cheaper it is.

What a late return costs

Under Cabinet Decision No. 75 of 2023, the late filing penalty is AED 500 for each month, or part of a month, for the first twelve months, rising to AED 1,000 per month from the thirteenth month onwards. A part month counts as a full month, so a return filed three days late already costs AED 500.

Late payment is penalised separately. Tax that remains unpaid after the due date attracts 14% per annum, applied monthly on the outstanding balance. Filing on time but paying late does not avoid this, and neither does paying without filing.

A worked example

A company with a 31 December 2025 year end that files in March 2027, six months late, with AED 40,000 of tax due and unpaid: six months of late filing penalties at AED 500 gives AED 3,000, plus roughly 1.17% per month of late payment interest on the AED 40,000. The longer it runs, the worse the arithmetic gets, and at month thirteen the monthly filing penalty doubles.

If you have already filed but the return was wrong

A voluntary disclosure is the correct route. Correcting an error yourself costs considerably less than waiting for the FTA to find it, and the disclosure carries interest on the tax difference from the original due date rather than a fixed penalty for the error alone.

What to do now

• File the outstanding return, even if you cannot pay the tax immediately. The filing penalty stops accruing once the return is in.
• Pay what you can. Late payment interest runs on the unpaid balance, so a partial payment reduces it.
• Check whether your records support the figures. A rushed return filed on unreliable numbers usually leads to a voluntary disclosure later.
• If the delay was caused by missing bookkeeping, deal with the bookkeeping first. The return is only as good as the trial balance behind it.

Dormant and loss-making companies still have to file

There is no exemption for a company that made no profit, made a loss, or did not trade at all. If you hold a trade licence and you are registered for Corporate Tax, the return is due and the penalties apply in exactly the same way.

Talk to us

If you have missed the deadline, we can bring the records up to date, prepare the return and file it, and advise on whether a penalty reconsideration is worth pursuing in your circumstances. Call +971 55 441 1036 or email info@dawnconsultancy.com.