CTAX

Article 28:Non allowable expenses

1. Expenditure incurred wholly and exclusively for the purposes of the Taxable Person’s Business that is not capital in nature shall be deductible in the Tax Period in which it is incurred, subject to the provisions of this Decree-Law.
2. For the purposes of calculating the Taxable Income for a Tax Period, no deduction is allowed for the following:
- a) Expenditure not incurred for the purposes of the Taxable Person’s Business.
- b) Expenditure incurred in deriving Exempt Income.
- c) Losses not connected with or arising out of the Taxable Person’s Business.
- d) Such other expenditure as may be specified in a decision issued by the Cabinet at the suggestion of the Minister.
3. If expenditure is incurred for more than one purpose, a deduction shall be allowed for:
- a) Any identifiable part or proportion of the expenditure incurred wholly and exclusively for the purposes of deriving Taxable Income.
- b) An appropriate proportion of any unidentifiable part or proportion of the expenditure incurred for the purposes of deriving Taxable Income that has been determined on a fair and reasonable basis, having regard to the relevant facts and circumstances of the Taxable Person’s Business.

Article 31:Specific interest deduction

1. No deduction shall be allowed for Interest expenditure incurred on a loan obtained, directly or indirectly, from a Related Party in respect of any of the following transactions:
- a) A dividend or profit distribution to a Related Party.
- b) A redemption, repurchase, reduction or return of share capital to a Related Party.
- c) A capital contribution to a Related Party.
- d) The acquisition of an ownership interest in a Person who is or becomes a Related Party following the acquisition.
2. Clause 1 of this Article shall not apply where the Taxable Person can demonstrate that the main purpose of obtaining the loan and carrying out the transaction referred to under Clause 1 of this Article is not to gain a Corporate Tax advantage.
3. For the purposes of Clause 2 of this Article, no Corporate Tax advantage shall be deemed to arise where the Related Party is subject to Corporate Tax or a tax of a similar character under the applicable legislation of a foreign jurisdiction on the Interest at a rate not less than the rate specified in paragraph (b) of Clause 1 of Article 3 of this Decree-Law.

Article 32:Entertainment expense

1. Subject to Article 28 of this Decree-Law, a Taxable Person shall be allowed to deduct 50% (fifty percent) of any entertainment, amusement, or recreation expenditure incurred during a Tax Period.
2. Clause 1 of this Article applies to any expenditure incurred for the purposes of receiving and entertaining the Taxable Person’s customers, shareholders, suppliers or other business partners, including, but not limited to, expenditure in connection with any of the following:
- a) Meals.
- b) Accommodation.
- c) Transportation.
- d) Admission fees.
- e) Facilities and equipment used in connection with such entertainment, amusement or recreation.
- f) Such other expenditure as specified by the Minister.

Article 33:Non - deductible expenses

No deduction is allowed for:

1. Donations, grants or gifts made to an entity that is not a Qualifying Public Benefit Entity.
2. Fines and penalties, other than amounts awarded as compensation for damages or breach of contract.
3. Bribes or other illicit payments.
4. Dividends, profit distributions or benefits of a similar nature paid to an owner of the Taxable Person.
5. Amounts withdrawn from the Business by a natural person who is a Taxable Person under paragraph (c) of Clause 3 of Article 11 of this Decree-Law or a partner in an Unincorporated Partnership.
6. Corporate Tax imposed on a Taxable Person under this Decree-Law.
7. Input Value Added Tax incurred by a Taxable Person that is recoverable under Federal Decree-Law No. (8) of 2017 referred to in the preamble and what replaces it.
8. Tax on income imposed on the Taxable Person outside the State.
9. Such other expenditure as specified in a decision issued by the Cabinet at the suggestion of the Minister.

Article 34:Transactions with related parties and connected persons

In determining Taxable Income, transactions and arrangements between Related Parties must meet the arm’s length standard as specified in Clauses 2, 3, 4 and 5 of this Article and any conditions that may be prescribed in a decision issued by the Authority.
A transaction or arrangement between Related Parties meets the arm’s length standard if the results of the transaction or arrangement are consistent with the results that would have been realised if Persons who were not Related Parties had engaged in a similar transaction or arrangement under similar circumstances.
The arm’s length result of a transaction or arrangement between Related Parties must be determined by applying one or a combination of the following transfer pricing methods:
- The comparable uncontrolled price method.
- The resale price method.
- The cost-plus method.
- The transactional net margin method.
- The transactional profit split method.
The Taxable Person may apply any transfer pricing method other than the methods listed in Clause 3 of this Article where the Taxable Person can demonstrate that none of the above methods can be reasonably applied to determine an arm’s length result and that any such other transfer pricing method used satisfies the condition of Clause 2 of this Article.
The choice and application of a transfer pricing method or combination of transfer pricing methods under Clause 3 or 4 of this Article must be made having regard to the most reliable transfer pricing method and taking into account following factors:
- The contractual terms of the transaction or arrangement.
- The characteristics of the transaction or arrangement.
- The economic circumstances in which the transaction or arrangement is conducted.
- The functions performed, assets employed, and risks assumed by the Related Parties entering into the transaction or arrangement.
- The business strategies employed by the Related Parties entering into the transaction or arrangement.
The Authority’s examination as to whether income and expenditures resulting from the Taxable Person’s relevant transactions or arrangements meet the arm’s length standard shall be based on the transfer pricing method used by the Taxable Person in accordance with Clause 3 or 4 of this Article, provided such transfer pricing method is appropriate having regard to the factors mentioned in Clause 5 of this Article.
Application of the selected transfer pricing method or combination of transfer pricing methods in accordance with Clause 3 or 4 of this Article may result in an arm’s length range of financial results or indicators acceptable for establishing the arm’s length result of a transaction or arrangement between Related Parties, subject to any conditions specified in a decision issued by the Authority.
Where the result of the transaction or arrangement between Related Parties does not fall within the arm’s length range, the Authority shall adjust the Taxable Income to achieve the arm’s length result that best reflects the facts and circumstances of the transaction or arrangement.
Where the Authority makes an adjustment to the Taxable Income pursuant to Clause 8 of this Article, the Authority shall rely on information that can or will be made available to the Taxable Person.
Where the Authority or a Taxable Person adjusts the Taxable Income for a transaction or arrangement to meet the arm’s length standard, the Authority shall make a corresponding adjustment to the Taxable Income of the Related Party that is party to the relevant transaction or arrangement.
Where a foreign competent authority makes an adjustment to a transaction or arrangement involving a Taxable Person to meet the arm’s length standard, such Taxable Person can make anapplication to the Authority to make a corresponding adjustment to its Taxable Income.

Article 20 : Unrealised gain and losses

all assets and liabilities that are subject to fair value or impairment accounting under the applicable accounting standards; or
all assets and liabilities held on capital account at the end of a Tax Period, whilst taking into account any unrealized gain or loss that arises in connection with assets and liabilities held on revenue account at the end of that period.
“Assets held on capital account” refers to assets that the Person does not trade, assets that are eligible for depreciation, or assets treated under applicable accounting standards as property, plant and equipment, investment property, intangible assets, or other non-current assets.
“Liabilities held on capital account” refers to liabilities, the incurring of which does not give rise to deductible expenditure under Chapter Nine of this Decree-Law, or liabilities treated under applicable accounting standards as non-current liabilities.
“Assets and liabilities held on revenue account” refers to assets and liabilities other than those held on a capital account.
An “unrealized gain or loss” includes an unrealized foreign exchange gain or loss.

Article 22:Dividend and profit distribution from UAE company

The following income and related expenditure shall not be taken into account in determining the Taxable Income: Dividends and other profit distributions received from a juridical person that is a Resident Person.
Dividends and other profit distributions received from a Participating Interest in a foreign juridical person as specified in Article 23 of this Decree-Law.
Any other income from a Participating Interest as specified in Article 23 of this Decree-Law.
Income of a Foreign Permanent Establishment that meets the condition of Article 24 of this Decree-Law.
Income derived by a Non-Resident Person from operating aircraft or ships in international transportation that meets the conditions of Article 25 of this Decree- law

Article 23:Participation exemption

Income from a Participating Interest shall be exempt from Corporate Tax, subject to the conditions of this Article.
A Participating Interest means, a 5% (five percent) or greater ownership interest in the shares or capital of a juridical person, referred to as a “Participation” for the purposes of this Chapter where all of the following conditions are met:
- The Taxable Person has held, or has the intention to hold, the Participating Interest for an uninterrupted period of at least (12) twelve months.
- The Participation is subject to Corporate Tax or any other tax imposed under the applicable legislation of the country or territory in which the juridical person is resident which is of a similar character to Corporate Tax at a rate not less than the rate specified in paragraph (b) of Clause 1 of Article 3 of this Decree-Law.
- The ownership interest in the Participation entitles the Taxable Person to receive not less than 5% (five percent) of the profits available for distribution by the Participation, and not less than 5% (five percent) of the liquidation proceeds on cessation of the Participation.
- Not more than 50% (fifty percent) of the direct and indirect assets of the Participation consist of ownership interests or entitlements that would not have qualified for an exemption from Corporate Tax under this Article if held directly by the Taxable Person, subject to any conditions that may be prescribed under paragraph (e) of this Clause. e) Any other conditions as may be prescribed by the Minister.
A Participation shall be treated as having met the condition under paragraph (b) of Clause 2 of this Article where all of the following conditions are met:

The principal objective and activity of the Participation is the acquisition and holding of shares or equitable interests that meet the conditions of Clause 2 of this Article.
The income of the Participation derived during the relevant Tax Period or Tax Periods substantially consists of income from Participating Interests.

A Participation in a Qualifying Free Zone Person or an Exempt Person shall be treated as having met the condition under paragraph (b) of Clause 2 of this Article, subject to any conditions that may be prescribed by the Minister.
Where the conditions of Clause 2 of this Article continue to be met, the following income shall not be taken into account in determining Taxable Income:

Dividends and other profit distributions received from a foreign Participation that is not a Resident Person under paragraph
Gains or losses on the transfer, sale, or other disposition of a Participating Interest (or part thereof) derived after expiry of the time period specified in paragraph (a) of Clause 2 or Clause 9 of this Article
Foreign exchange gains or losses in relation to a Participating Interest.
Impairment gains or losses in relation to a Participating Interest

The exemption under this Article shall not apply to income derived by the Taxable Person from a Participating Interest insofar as:

the Participation can claim a deduction for the dividend or other distributions made to the Taxable Person under the applicable tax legislation;
the Taxable Person has recognised a deductible impairment loss in respect of the Participating Interest prior to the Participating Interest meeting the conditions of Clause 2 of this Article;
the Taxable Person or its Related Party who is subject to Corporate Tax under this Decree-Law has recognised a deductible impairment loss in respect of a loan receivable from the Participation.

Where the impairment loss referred to in paragraph (c) of Clause 6 of this Article is reversed in a subsequent Tax Period, the associated income of the Taxable Person shall be exempt from Corporate Tax in that Tax Period up to the amount of income from the Participating Interest that was not exempted under paragraph (c) of Clause 6 of this Article.
The exemption under this Article does not apply to a loss realised on the liquidation of a Participation.
The exemption under this Article shall not apply for a period of (2) two years where a Participation was acquired in exchange for the transfer of an ownership interest that did not meet the conditions of Clause 2 of this Article or a transfer that was exempted under Article 26 or 27 of this Decree-Law.
Where a Taxable Person fails to hold a 5% (five percent) or greater ownership interest in the Participation for an uninterrupted period of at least (12) twelve months, any income previously not taken into account under this Article shall be included in the calculation of the Taxable Income in the Tax Period in which the ownership interest in the Participation falls below 5% (five percent).
The Minister may prescribe that an ownership interest in the shares or capital of a juridical person meets the minimum ownership requirement under Clause 2 of this Article where the acquisition cost of that ownership interest exceeds a threshold specified by the Minister.

Other Deductions

Other Addition

Article 61: Transitional Rule

A Taxable Person’s opening balance sheet for Corporate Tax purposes shall be the closing balance sheet prepared for financial reporting purposes under accounting standards applied in the State on the last day of the Financial Year that ends immediately before their first Tax Period commences, subject to any conditions or adjustments that may be prescribed by the Minister.
The opening balance sheet referred to in Clause 1 of this Article shall be prepared taking into consideration the arm’s length principle in accordance with Article 34 of this Decree-Law.
For the purposes of Clauses 1 and 2 of this Article, and as an exception to the provisions of Article 70 of this Decree-Law, the provisions of Article 50 of this Decree-Law shall apply to transactions or arrangements entered into on or after the date this Decree-Law is published in the Official Gazette.
The Cabinet may, at the suggestion of the Minister, issue a decision prescribing other transitional measures related to the implementation of this Decree-Law and the application of its provisions.

Article 26:Transfers within a qualifying group

No gain or loss needs to be taken into account in determining the Taxable Income in relation to the transfer of one or more assets or liabilities between two Taxable Persons that are members of the same Qualifying Group.
Two Taxable Persons shall be treated as members of the same Qualifying Group where all of the following conditions are met:
- The Taxable Persons are juridical persons that are Resident Persons, or NonResident Persons that have a Permanent Establishment in the State.
- Either Taxable Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in the other Taxable Person, or a third Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in each of the Taxable Persons.
- None of the Persons are an Exempt Person.
- None of the Persons are a Qualifying Free Zone Person.
- The Financial Year of each of the Taxable Persons ends on the same date.
- Both Taxable Persons prepare their financial statements using the same accounting standards.
For the purposes of this Decree-Law, where a Taxable Person applies Clause 1 of this Article: a. the asset or liability shall be treated as being transferred at its net book value at the time of transfer so that neither a gain nor a loss arises; and b. the value of any consideration paid or received against the transfer of the asset or liability shall equal the net book value of the transferred asset or liability.
The provision of Clause 1 of this Article shall not apply where, within (2) two years from the date of the transfer, any of the following occurs:

There is a subsequent transfer of the asset or liability outside of the Qualifying Group.
The Taxable Persons cease to be members of the same Qualifying Group.

Where Clause 4 of this Article applies, the transfer of the asset or liability shall be treated as having taken place at Market Value at the date of the transfer for the purposes of determining the Taxable Income of both Taxable Persons for the relevant Tax Period.

Article 27: Business restructuring relief

No gain or loss needs to be taken into account in determining Taxable Income in any of the following circumstances: a. A Taxable Person transfers its entire Business or an independent part of its Business to another Person who is a Taxable Person or will become a Taxable Person as a result of the transfer in exchange for shares or other ownership interests of the Taxable Person that is the transferee. b. One or more Taxable Persons transfer their entire Business to another Person who is a Taxable Person or will become a Taxable Person as a result of the transfer in exchange for shares or other ownership interests of the Taxable Person that is the transferee, and the Taxable Person or Taxable Persons that are the transferor cease to exist as a result of the transfer.
Clause 1 of this Article applies where all of the following conditions are met:

The transfer is undertaken in accordance with, and meets all the conditions imposed by, the applicable legislation of the State.
The Taxable Persons are Resident Persons, or Non-Resident Persons that have a Permanent Establishment in the State.
None of the Persons are an Exempt Person.
None of the Persons are a Qualifying Free Zone Person.
The Financial Year of each of the Taxable Persons ends on the same date.
The Taxable Persons prepare their financial statements using the same accounting standards
The transfer under Clause 1 of this Article is undertaken for valid commercial or other non-fiscal reasons which reflect economic reality.

For the purposes of this Decree-Law, where a Taxable Person applies Clause 1 of this Article, all of the following must be observed:

The assets and liabilities transferred shall be treated as being transferred at their net book value at the time of transfer so that neither a gain nor a loss arises.
The value of the shares or ownership interests received under paragraph (a) of Clause 1 of this Article shall not exceed the net book value of the assets transferred and liabilities assumed, less the value of any other form of consideration received.
The value of the shares or ownership interests received under paragraph (b) of Clause 1 of this Article shall not exceed the book value of the shares or ownership interests surrendered, less the value of any other form of consideration received.
Any unutilised Tax Losses incurred by the Taxable Person that is the transferor prior to the Tax Period in which the transfer under Clause 1 of this Article completes may become carried forward Tax Losses of the Taxable Person that is the transferee, subject to conditions to be prescribed by the Minister.

The provisions of this Article shall apply, as the context requires, where, in the case of a transfer under Clause 1 of this Article:

shares or ownership interests are received by a Person other than the Taxable Person that is the transferor;
shares or ownership interests are issued or granted by a Person other than the Taxable Person that is the transferee; or
no shares or ownership interests are received by the Taxable Person who is a partner in an Unincorporated Partnership that is treated as a Taxable Person under Clause 9 of Article 16 of this Decree-Law

Where a Taxable Person transfers an independent part of its Business, paragraph (d) of Clause 3 of this Article shall apply only to those unutilised Tax Losses that can be reasonably attributed to the independent part of the Business being transferred.
The provision of Clause 1 of this Article shall not apply where, within (2) two years from the date of the transfer, any of the following occurs:

The shares or other ownership interests in the Taxable Person that is the transferor or the transferee are sold, transferred or otherwise disposed of, in whole or part, to a Person that is not a member of the Qualifying Group to which the relevant Taxable Persons belong.
There is a subsequent transfer or disposal of the Business or the independent part of the Businesses transferred under Clause 1 of this Article.

Where Clause 6 of this Article applies, the transfer of the Business or the independent part of the Business shall be treated as having taken place at Market Value at the date of the transfer.

Article 30 : Interest expenses

A Taxable Person’s Net Interest Expenditure shall be deductible up to 30% (thirty percent) of the Taxable Person’s accounting earnings before the deduction of interest, tax, depreciation and amortisation (EBITDA) for the relevant Tax Period, excluding any Exempt Income under Article 22 of this Decree-Law.
A Taxable Person’s Net Interest Expenditure for a Tax Period is the amount by which the Interest expenditure incurred during the Tax Period, including the amount of any Net Interest Expenditure carried forward under Clause 4 of this Article, exceeds the taxable Interest income derived during that same period.
The limitation under Clause 1 of this Article shall not apply where the Net Interest Expenditure of the Taxable Person for the relevant Tax Period does not exceed an amount specified by the Minister.
The amount of Net Interest Expenditure disallowed under Clause 1 of this Article may be carried forward and deducted in the subsequent (10) ten Tax Periods in the order in which the amount was incurred, subject to Clauses 1 and 2 of this Article.
Interest expenditure disallowed under any other provision of this Decree-Law shall be excluded from the calculation of Net Interest Expenditure under Clause 2 of this Article.
Clauses 1 to 5 of this Article shall not apply to the following Persons:

A Bank.
An Insurance Provider.
A natural person undertaking a Business or Business Activity in the State
Any other Person as may be determined by the Minister.

The Minister may issue a decision to specify the application of Clauses 1 and 2 of this Article to a Taxable Person that is related to one or more Persons through ownership or control and there is an obligation on them under applicable accounting standards for their financial statements to be consolidated.

Article 37 : Losses set off , transferred and carried forward

Article 38 : Losses received from group companies

A Tax Loss or a portion thereof may be offset against the Taxable Income of another Taxable Person where all of the following conditions are met:

Both Taxable Persons are juridical persons.
Both Taxable Persons are Resident Persons.
Either Taxable Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in the other, or a third Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in each of the Taxable Persons.
The common ownership under paragraph (c) of Clause 1 of this Article must exist from the start of the Tax Period in which the Tax Loss is incurred to the end of the Tax Period in which the other Taxable Person offsets the Tax Loss transferred against its Taxable Income.
None of the Persons are an Exempt Person.
None of the Persons are a Qualifying Free Zone Person.
The Financial Year of each of the Taxable Persons ends on the same date
Both Taxable Persons prepare their financial statements using the same accounting standards.

Where a Taxable Person transfers its Tax Loss to another Taxable Person under Clause 1 of this Article:

the Taxable Person which the Tax Loss is transferred to shall reduce its Taxable Income for the relevant Tax Period;
the total Tax Loss offset shall not exceed the amount allowed under Clause 2 of Article 37 of this Decree-Law; and
the Taxable Person shall reduce its available Tax Losses by the amount of the Tax Loss transferred to the other Taxable Person for the relevant Tax Period.

Article 47:Foreign tax credit

1. Corporate Tax due under Article 3 of this Decree-Law can be reduced by the amount of Foreign Tax Credit for the relevant Tax Period.
2. The Foreign Tax Credit under this Decree-Law cannot exceed the amount of Corporate Tax due on the relevant income.
3. Any unutilised Foreign Tax Credit as a result of Clause 2 of this Article cannot be carried forward or carried back.
4. A Taxable Person shall maintain all necessary records for the purposes of claiming a foreign tax credit.

Corporate Tax paid

A Taxable Person must settle the Corporate Tax Payable under this Decree-Law within (9) nine months from the end of the relevant Tax Period, or by such other date as determined by the Authority.

Penalty on unsettled payable amount

Cabinet Decision No. (75) of 2023 On the Administrative Penalties for Violations Related to the Application of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses The Cabinet:

- Having reviewed the Constitution, - Federal Law No. (1) of 1972 on the Competences of the Ministries and Powers of the Ministers, and its amendments,

- Federal Decree-Law No. (13) of 2016 on the Establishment of the Federal Tax Authority, and its amendments,

- Federal Law No. (14) of 2016 on Violations and Administrative Penalties in the Federal Government,

- Federal Decree-Law No. (28) of 2022 on Tax Procedures, - Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses,

- Cabinet Decision No. (40) of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE, and its amendments,

- Pursuant to what was presented by the Minister of Finance and approved by the Cabinet,

Has decided:

Article (1)

Definitions

Definitions in Federal Decree-Law No. (28) of 2022 on Tax Procedures and in Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses shall apply to this Decision, otherwise, the following words and expressions shall have the meanings assigned against each, unless the context otherwise requires:

Tax:

Corporate Tax.

Tax Procedures Law:

Federal Decree-Law No. (28) of 2022 on Tax Procedures .
Corporate Tax Law: Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses.

Due Tax:

Tax that is calculated and imposed under the provisions of the Corporate Tax Law

Administrative Penalties:

Monetary amounts imposed upon the Person by the Authority for breaching the provisions of the Tax Procedures Law, the Corporate Tax Law or decisions issued by the Cabinet for execution thereof.

Tax Audit:

A procedure undertaken by the Authority to inspect the commercial records, information, data or goods related to a Person to determine whether the Person has fulfilled his obligations under the Tax Procedures Law or the Corporate Tax Law.

Declaration:

A declaration made pursuant to Clauses (5) and (6) of Article (53) or Clause (1) of Article (55) of the Corporate Tax Law.

Tax Difference

The difference between the Due Tax as calculated and the Due Tax as it should have been calculated.

Article (2)

Scope of Application

Notwithstanding the provisions of Cabinet Decision No. (40) of 2017 referred to above, the Administrative Penalties included in the table annexed to this Decision shall apply to violations related to the application of the Corporate Tax Law.

Article (3)

Date of Application of Monthly Administrative Penalties

For the purposes of Clauses (3), (6), (7), (8), and (13) of the table annexed to this Decision, if any penalty is to be imposed on the same date monthly, the date for a month, that does not have a corresponding date for that date, shall be considered to be the last day of that month, however, the penalty for all other months shall be imposed on the same date the monthly penalty was first imposed.

Article (4)

Publication and Entry into Force

Table of Violations and Administrative Penalties Annexed to Cabinet Decision No. (75) of 2023 on Violations Related to the Application of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses

No.	Description of Violation	Administrative Penalty Amount in AED
01.	Failure of the Person conducting a Business or Business Activity or having a Tax obligation under the Tax Procedures Law or the Corporate Tax Law to keep the required records and other information specified in the Tax Procedures Law and the Corporate Tax Law.	One of the following penalties shall apply: 1. 10,000 for each violation. 2. 20,000 in each case of repeated violation within 24 months from the date of the last violation
02.	Failure of the Person conducting Business or Business Activity or having a Tax obligation under the Tax Procedures Law or the Corporate Tax Law to submit the data, records and documents related to Tax in Arabic to the Authority when requested.	5,000
03.	Failure of the Registrant to submit a deregistration application within the timeframe specified in the Corporate Tax Law and its implementing decisions.	1,000 in case of late submission of the application and on the same date monthly, up to a maximum of 10,000 .
04.	Failure of the Registrant to inform the Authority of any case that may require the amendment of the information pertaining to his Tax record kept by the Authority.	One of the following penalties shall apply: 1. 1,000 for each violation. 2. 5,000 in each case of repeated violation within 24 months from the date of the last violation.
05.	Failure of the Legal Representative to provide notification of their appointment within the specified timeframes, in which case the penalties will be due from the Legal Representative's own funds.	1,000
06.	Failure of the Legal Representative to file a Tax Return within the specified timeframes, in which case the penalties will be due from the Legal Representative's own funds.	1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted, and on the same date monthly thereafter.
07.	Failure of the Registrant to submit a Tax Return within the timeframe specified in the Corporate Tax Law.	1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted, and on the same date monthly thereafter.
08.	Failure of the Taxable Person to settle the Payable Tax.	1. A monthly penalty of 14% per annum, for each month or part thereof, on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter. 2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows: a. 20 Business Days from the date of submission, in the case of a Voluntary Disclosure. b. 20 Business Days from the date of receipt, in the case of a Tax Assessment.
09.	The Registrant submits an incorrect Tax Return.	500, unless the Person corrects his Tax Return before the expiry of the deadline for the submission of the Tax Return according to the Corporate Tax Law.
10.	The submission of a Voluntary Disclosure by the Taxable Person in relation to errors in the Tax Return, Tax Assessment or Tax refund application pursuant to Clauses (1) and (2) of Article (10) of the Tax Procedures Law.	A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be applied as of the date following the due date of the relevant Tax Return, the submission of the Tax refund application, or the Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted.
11.	Failure of the Taxable Person to submit a Voluntary Disclosure in relation to errors in the Tax Return, Tax Assessment or Tax refund application pursuant to Clauses (1) and (2) of Article (10) of the Tax Procedures Law, before being notified by the Authority that it will be subject to a Tax Audit.	The following penalties shall apply: 1. A fixed penalty of 15% on the Tax Difference. 2. A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be applied as follows: a. Where the Taxable Person submits a Voluntary Disclosure after being notified that it will be subject to a Tax Audit by the Authority, the penalty shall be imposed for the period from the day following the due date of the relevant Tax Return, or the submission of the Tax refund application or Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted. b. Where the Taxable Person fails to submit a Voluntary Disclosure, the penalty shall be imposed as of the date following the due date of the relevant Tax Return, or the submission of the Tax refund application or Notification of the Tax Assessment and until the date of issuance of the Tax Assessment.
12.	Failure of a Person subject to Tax Audit, his Tax Agent or Legal Representative to offer facilitation to the Tax Auditor in violation of the provisions of Article (20) of the Tax Procedures Law, in which case the penalties will be due from the Person’s, Legal Representative’s or Tax Agent’s own funds, as applicable.	20,000
13.	Failure of a Person to submit, or late submission of a Declaration to the Authority, as required in accordance with the provisions of the Corporate Tax Law.	1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the Declaration must be submitted, and on the same date monthly thereafter.

On the Administrative Penalties for Violations Related to the Application of Federal Decree Law No. (47) of 2022 on the Taxation of Corporations and Businesses.

Failure of the Taxable Person to settle the Payable Tax

1. A monthly penalty of 14% per annum, for each month or part thereof, on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter. 2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows: a. 20 Business Days from the date of submission, in the case of a Voluntary Disclosure. b. 20 Business Days from the date of receipt, in the case of a Tax Assessment.

Penalty for late submission of tax return

On the Administrative Penalties for Violations Related to the Application of Federal Decree Law No. (47) of 2022 on the Taxation of Corporations and Businesses

Failure of the Registrant to submit a Tax Return within the timeframe specified in the Corporate Tax Law.

500 for each month, or part thereof, for the first twelve months.
1,000 for each month, or part thereof, from the thirteenth month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted, and on the same date monthly thereafter

Footnotes/pending issues

List of documents

Welcome to CTax

Articles

Instant Helper

Article 28:Non allowable expenses

Article 31:Specific interest deduction

Article 32:Entertainment expense

Article 33:Non - deductible expenses

Article 34:Transactions with related parties and connected persons

Article 20 : Unrealised gain and losses

Article 22:Dividend and profit distribution from UAE company

Article 23:Participation exemption

Other Deductions

Other Addition

Article 61: Transitional Rule

Article 26:Transfers within a qualifying group

Article 27: Business restructuring relief

Article 30 : Interest expenses

Article 37 : Losses set off , transferred and carried forward

Article 38 : Losses received from group companies

Article 47:Foreign tax credit

Corporate Tax paid

Penalty on unsettled payable amount

Penalty for late submission of tax return

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Article 28:Non allowable expenses

Article 31:Specific interest deduction

Article 32:Entertainment expense

Article 33:Non - deductible expenses

Article 34:Transactions with related parties and connected persons

Article 20 : Unrealised gain and losses

Article 22:Dividend and profit distribution from UAE company

Article 23:Participation exemption

Other Deductions

Other Addition

Article 61: Transitional Rule

Article 26:Transfers within a qualifying group

Article 27: Business restructuring relief

Article 30 : Interest expenses

Article 37 : Losses set off , transferred and carried forward

Article 38 : Losses received from group companies

Article 47:Foreign tax credit

Corporate Tax paid

Penalty on unsettled payable amount

Penalty for late submission of tax return