Understanding the Late Payment Penalty VAT UAE – What You Need to Know
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Published date: 2025/08/28
- Location: Dubai, Dubai, Dubai, United Arab Emirates
Name: Dubizbusiness
Phone: 056369xxxx
Late VAT payments in the UAE attract strict penalties to ensure businesses remain compliant. The late payment penalty VAT UAE begins at 2% of the unpaid tax immediately after the deadline, followed by an additional 4% if the payment is still outstanding seven days later. If the tax remains unpaid beyond one month, a daily fine of 1% is levied, accumulating up to a maximum of 300% of the original tax amount. These escalating penalties can severely impact cash flow and financial stability, while also damaging a company's reputation with the Federal Tax Authority (FTA). To mitigate risks, businesses should prioritize accurate record-keeping, set clear payment reminders, and consult VAT specialists for timely compliance.
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