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Quick answer
Under Cabinet Decision 129 of 2025 (from 14 April 2026), a tax return that contains an error carries a fixed AED 500 penalty. The catch most people miss: it can be levied whenever the FTA processes or reviews the return — even a year or more after you filed, for a past tax period. There’s no point at which an inaccurate filed return becomes “safe.” You can avoid it by reconciling and reviewing before filing, and by correcting errors early — there’s no penalty if you fix the return before the deadline or via a voluntary disclosure with no additional tax due. In short: file carefully, because an error you leave in can resurface later.
You filed your Corporate Tax return, it went through, you moved on. Then — a year or more later — an FTA notice lands: an administrative penalty for an incorrect return, for a tax period that closed long ago. It feels like it came out of nowhere. It didn’t: a filed return isn’t a closed one, and an error in it can be flagged whenever the FTA gets to it.
What it is
The AED 500 incorrect-return penalty
Under Cabinet Decision 129 of 2025 (effective 14 April 2026), submitting a tax return that contains an error carries a fixed AED 500 penalty (reduced from the old AED 1,000 / AED 2,000). It’s a flat administrative penalty for an inaccurate return — a wrong revenue figure, a misclassification, a number that doesn’t hold up. It applies regardless of the size of the business.
The part people miss
It can be levied long after you filed
Filing isn’t a finish line
The penalty can be raised whenever the FTA processes or reviews the return — which may be many months, or years, after you submitted it. The FTA can assess within its statutory window (generally up to five years), so a return for a 2024 period can attract this penalty in 2026. There is no point at which an inaccurate filed return becomes “safe.” If the numbers were wrong, the exposure sits there until the FTA reaches it.
How to avoid it
Accuracy at filing — and early correction
- Reconcile before you file. Your Corporate Tax figures should tie back to your accounts and your VAT returns — a revenue number that doesn’t match is exactly what gets flagged.
- Review the return before submission, ideally by someone other than whoever prepared it.
- Correct errors early. There’s no penalty if you fix the return before the filing deadline, or via a voluntary disclosure that results in no additional tax. Catching it yourself, early, is far cheaper than the FTA catching it later.
If you’ve been charged
What to do now
If a penalty has been imposed and you believe it’s wrong, you can submit a reconsideration request via your EmaraTax account. If the return genuinely contained an error, fix the underlying issue — and be aware that if correcting it changes the tax due, a voluntary disclosure and its own penalty can also come into play. Either way, the lesson is the same: get the return right the first time, because an error you leave in can resurface whenever the FTA looks.
Want your Corporate Tax return filed right the first time?
We reconcile your figures to your accounts and VAT returns, review before filing, and correct any earlier errors properly — so an inaccurate return doesn’t come back as a penalty months later. CT filing from AED 249.
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FAQ
What is the incorrect tax return penalty in the UAE?
Under Cabinet Decision 129 of 2025, effective 14 April 2026, submitting a tax return that contains an error carries a fixed AED 500 penalty — reduced from the earlier AED 1,000 for a first offence and AED 2,000 for a repeat. It is a flat administrative penalty for an inaccurate return and applies regardless of the size of the business.
Can the incorrect-return penalty be imposed after I've already filed?
Yes. It can be raised whenever the FTA processes or reviews the return, which may be months or years after submission. The FTA can assess within its statutory window — generally up to five years — so a return for a 2024 period can attract the penalty in a later year. A filed return that contained an error does not become “safe” simply because it was accepted.
How do I avoid the incorrect-return penalty?
Reconcile your Corporate Tax figures to your accounts and VAT returns before filing, have the return reviewed, and correct any error early. There is no penalty if you fix the return before the filing deadline, or via a voluntary disclosure that results in no additional tax due. Catching an error yourself, early, is far cheaper than the FTA finding it later.
What counts as an incorrect return?
A return that contains an error making it inaccurate — for example a wrong revenue figure, a misclassification, or a number that cannot be supported by your records. Often it stems from a data error, such as revenue reported to Corporate Tax that does not match the figures in your VAT returns or accounts.
What can I do if I've been charged an incorrect-return penalty?
If you believe the penalty is wrong, you can submit a reconsideration request through your EmaraTax account. If the return genuinely contained an error, correct the underlying issue — and note that if the correction changes the tax due, a voluntary disclosure with its own penalty may also apply. The reliable protection is to file accurately in the first place.
General guidance on the incorrect-return penalty, current as of September 2026; not tax advice. Based on the Tax Procedures Law and Cabinet Decision 129 of 2025 (effective 14 April 2026). Penalty rules and assessment windows depend on your circumstances and may change — confirm your position on EmaraTax or with a qualified tax adviser.