The Federal Tax Authority (FTA) in the UAE has announced that corporations failing to pay their due corporate tax will incur a monthly penalty of 14 percent per annum. This penalty is applied to the unpaid tax amount and begins accruing from the day after the payment deadline. Each month following the deadline, the penalty will continue to accumulate on the same date.

According to the FTA, the due date for this corporate tax payment is set no later than nine months after the end of the relevant tax period. This is in accordance with Federal Decree-Law No. 47 of 2022 concerning Corporate Tax and its subsequent amendments. Corporations are urged to comply with these deadlines to avoid penalties.

The FTA’s clarification highlights the importance of timely tax payments for businesses operating in the UAE. As the country continues to enhance its tax framework, adherence to these regulations is essential for corporate compliance and financial planning.