Cabinet Decision No. 129 of 2025 overhauls the administrative penalties that apply under the UAE's Tax Procedures Law (Federal Decree-Law No. 28 of 2022). Issued on 9 October 2025 and effective from 14 April 2026, it resets the penalty amounts for late filings, record-keeping failures, voluntary disclosures and late tax payments, revising many of the figures previously set by Cabinet Decision No. 75 of 2023.
Key takeaways
- Cabinet Decision No. 129 of 2025 revises the administrative-penalty framework under the Tax Procedures Law (Federal Decree-Law No. 28 of 2022); it was issued on 9 October 2025 and takes effect on 14 April 2026.
- The penalty for late payment of tax moves to 14% per annum, charged monthly (or part thereof) on the unpaid tax, replacing the previous 2% immediate charge plus 4% monthly.
- Late filing of a tax return by a Legal Representative becomes a flat AED 1,000 for the first offence and AED 2,000 if repeated within 24 months, instead of the old monthly-escalating charge.
- A new definition of "Legal Representative" is introduced — a company manager, a guardian, trustee or curator, or any person legally appointed.
- Several fixed penalties fall sharply: failing to provide documents in Arabic drops from AED 20,000 to AED 5,000, and a voluntary disclosure on return errors becomes a flat AED 500 instead of AED 1,000 or 2,000.
- New violations are added — including a AED 10,000 penalty for late registration — while the penalty for late submission of a Declaration is withdrawn without replacement.
What Cabinet Decision No. 129 of 2025 changes
The Decision is best understood as a refinement rather than a rebuild. It expands the range of violations that carry a penalty and recalibrates the amounts, but it keeps the overall structure of the regime intact. Because it interacts with the earlier Cabinet Decision No. 75 of 2023 — which governs administrative penalties tied to the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) — the practical effect is a single, updated set of figures that taxpayers should apply to any violation occurring on or after 14 April 2026.
Revised penalties: before and after
The most visible changes are to the headline penalty amounts. The table below compares the position under Cabinet Decision No. 75 of 2023 with the revised amounts under Cabinet Decision No. 129 of 2025.
| Violation | Under CD 75 of 2023 | Under CD 129 of 2025 |
|---|---|---|
| Late filing of a tax return (Legal Representative) | AED 500/month (first 12 months), then AED 1,000/month | AED 1,000 first time; AED 2,000 if repeated within 24 months |
| Failure to maintain required records | AED 10,000 each; AED 20,000 repeated | AED 1,000 each; AED 20,000 repeated |
| Failure to provide documents in Arabic | AED 20,000 | AED 5,000 |
| Failure to inform the Authority of a change requiring amendment | AED 5,000 each; AED 10,000 repeated | AED 1,000 each; AED 5,000 repeated |
| Failure to notify appointment of a Legal Representative | AED 10,000 | AED 1,000 |
| Late settlement of payable tax | 2% + 4% monthly | 14% per annum, monthly or part thereof |
| Voluntary disclosure on return, assessment or refund errors | AED 1,000 / 2,000 | AED 500 fixed |
| No voluntary disclosure before an audit notice | 5%-40% escalating by period | 15% on the tax difference + 1% monthly |
| No voluntary disclosure after an audit notice | 50% + 4% monthly | 15% fixed + 1% monthly |
Read as a whole, the direction of travel is toward lower fixed penalties for administrative slips but a firmer, interest-style charge on unpaid tax.
The single most consequential change is the move to a 14% annual interest charge on unpaid tax, applied monthly. Late payment now accrues predictably over time, so the cost of deferring a known liability — or of leaving an assessment unresolved — is materially higher than under the old 2%-plus-4% structure.
The new "Legal Representative" definition
Cabinet Decision No. 129 of 2025 adds a defined meaning for "Legal Representative": the manager of a company, a guardian, trustee or curator, or any person legally appointed. The definition matters because several penalties now attach specifically to the Legal Representative's failure to file on time. In practice, SBC advisers find this is a quiet exposure, because many groups have never formally confirmed or notified who holds the role. Businesses should confirm who holds that role, ensure the appointment is properly notified to the Authority, and make sure that person understands their filing responsibilities and personal penalty exposure.
New penalties and the withdrawn provision
The Decision inserts a number of new or restated violations:
- A AED 10,000 penalty for failing to submit a registration application within the specified timeline.
- A AED 500 penalty for submitting an incorrect tax return — waived where the return is corrected before the deadline, or corrected through a voluntary disclosure.
- A 14% per annum monthly charge for failing to calculate tax due on behalf of another person, with a payment due date of 20 business days for tax assessments and voluntary disclosures.
- A penalty of 50% of the undeclared tax for failing to calculate tax due on the import of goods.
One provision has been withdrawn without a replacement: the penalty for failure or late submission of a Declaration, previously charged at AED 500 per month for the first 12 months and AED 1,000 per month thereafter.
What businesses should do before 14 April 2026
The effective date gives taxpayers a clear planning window. Review filing calendars so returns and registrations are submitted on time; confirm that Legal Representative appointments are documented and notified; tighten record-keeping to avoid the record and Arabic-documentation penalties; and reassess when a voluntary disclosure is worth filing given the revised amounts. For businesses carrying unpaid balances, the new 14% annual charge makes prompt settlement or a structured resolution more valuable than before — an area where our tax dispute and penalty support can help. Embedding deadlines and controls into a tax compliance and automation process reduces the risk of avoidable penalties across corporate tax obligations.
Frequently asked questions
When does Cabinet Decision No. 129 of 2025 take effect?
The Decision was issued on 9 October 2025 and takes effect on 14 April 2026. Violations occurring on or after that date are assessed against the revised penalty amounts.
What is the new penalty for late tax payment in the UAE?
Under Cabinet Decision No. 129 of 2025, late payment of tax attracts 14% per annum, charged monthly or part thereof on the unpaid amount. This replaces the previous 2% immediate charge plus 4% monthly.
Who is a "Legal Representative" under the new rules?
The Decision defines a Legal Representative as the manager of a company, a guardian, trustee or curator, or any person legally appointed. Several filing penalties attach specifically to this person, so the appointment should be clearly documented and notified.
Did any penalties decrease under Cabinet Decision No. 129 of 2025?
Yes. Several fixed penalties were reduced — for example, failing to provide documents in Arabic fell from AED 20,000 to AED 5,000, notifying the appointment of a Legal Representative fell from AED 10,000 to AED 1,000, and a voluntary disclosure on errors became a flat AED 500.
How SBC Tax Consulting can help
SBC helps UAE businesses stay ahead of the revised penalty regime. We model the cost of the new 14% annual charge against your outstanding balances, pressure-test where the recalibrated penalties change your voluntary-disclosure calculus, and build the deadline controls that keep those exposures from crystallising in the first place. Where penalties or assessments are already in play, our audit and dispute team supports resolution. To prepare before 14 April 2026, contact our team.
This publication is for general information only and does not constitute professional advice. Please consult your SBC advisor before acting on any matter covered here.