Cabinet Decision No. 129 of 2025 amends the administrative penalties framework for tax violations, with effect for violations committed after 14 April 2026. It changes how several penalties are calculated. It is not a general amnesty and does not clear historical positions automatically.
What happened
Cabinet Decision No. 129 of 2025, amending Cabinet Decision No. 40 of 2017, took effect on 14 April 2026 and applies to violations committed after that date. The Federal Tax Authority has publicly invited registrants to take advantage of the revised framework.
What changes in practice
The calculation and structure of several administrative penalties change. The important qualification is what the decision is not: it is not a general amnesty, and it does not automatically cancel penalties already accrued on historical positions. Registrants who assume otherwise will find the prior liability still standing.
Who it applies to
Corporate tax and VAT registrants with existing or ongoing violations — most commonly late corporate tax registration, late VAT returns and late payment. It applies equally to dormant entities, which remain subject to filing obligations notwithstanding the absence of trading activity.
The exposure
Penalties compound on positions that could be regularised. The practical risk is that many registrants have never checked the actual accrued amount on the FTA portal, and so neither quantify the liability nor act on it while the revised framework offers a route to reduce it.
What to do now
Check the penalty position for each registered entity directly on the FTA portal rather than relying on assumption. Where amounts are outstanding, establish whether the violation falls before or after 14 April 2026, since the applicable calculation differs, and prepare a regularisation plan on that basis.
Sources
Published 16 August 2026 on the basis of public sources and official United Arab Emirates instruments. This is not legal or tax advice. Verify your position with a qualified professional before acting.