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May 15, 2026

This Public Clarification, TAXP004, details the concessionary measures for redetermining administrative penalties imposed on taxpayers before 28 June 2021. It explains the framework established by Cabinet Decision No. 49 of 2021, later amended by Cabinet Decision No. 108 of 2021 to extend deadlines. The clarification outlines the conditions for taxpayers to benefit from a penalty waiver. To qualify, taxpayers must settle all payable tax and 30% of their total unsettled penalties imposed under Cabinet Decision No. 40 of 2017 by 31 December 2022. The FTA will then redetermine the outstanding amount, effectively waiving the remaining 70%.

TAXP004

Tax Procedures Public Clarification

Redetermination of Administrative Penalties Levied Prior to the Effective Date of Cabinet Decision No. 49 of 2021

Please be informed that Public Clarification TAXP004 replaces Public Clarification TAXP002.

Issue

On 28 April 2021, the Cabinet issued Decision No. 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE ("Cabinet Decision No. 49 of 2021"). Cabinet Decision No. 49 of 2021 amended some of the administrative penalties applicable to certain violations and allowed for a redetermination of some of the penalties already imposed.

On 30 December 2021, Cabinet Decision No. 49 of 2021 was amended by Cabinet Decision No. 108 of 2021 on the Amendment of Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE ("Cabinet Decision No. 108 of 2021"), with effect from 1 January 2022.

Cabinet Decision No. 108 of 2021 amends the timelines provided to benefit from the concessionary measures provided in the form of redetermination of administrative penalties.

This Public Clarification provides detailed information on the redetermination of some of the penalties already imposed.

Details relating to the amendments to administrative penalties in accordance with the First Article of Cabinet Decision No. 49 of 2021 have been discussed in the Tax Procedures Public Clarification "TAXP001 - Amendments to the Penalties Regime", available on the FTA's website.

Summary

Cabinet Decision No. 49 of 2021 provides for the ability to redetermine penalties imposed before its effective date (i.e. before 28 June 2021) where the penalties were imposed according to Cabinet Decision No. 40 of 2017 and certain conditions are met. This decision is applicable on all administrative penalties imposed as per Cabinet Decision No. 40 of 2017 whether in respect of tax procedures, VAT or Excise Tax.

Cabinet Decision No. 108 of 2021 extends the period within which a registrant can benefit from the penalty redetermination.

Detailed discussion

Background

The UAE introduced Excise Tax and VAT with effect from 1 October 2017 and 1 January 2018, respectively.