Tax Penalties in the UAE: How to Appeal and Request Reductions

14 June 2026

Administrative tax penalties are among the foremost concerns of registrants and businesses in the United Arab Emirates, particularly with the expanding application of Value Added Tax, Excise Tax and Corporate Tax. Yet the UAE tax system does not treat a penalty as a final, irreversible decision. It guarantees the person graduated legal avenues to challenge the penalty and seek its cancellation or reduction, alongside a separate mechanism to instalment, waive or refund administrative penalties when the relevant conditions are met. This article explains precisely how to appeal a tax penalty, the correct timelines and channels, and how to seek relief in accordance with the legislation in force.

How Do You Appeal Tax Penalties in the UAE and Request Their Reduction or Waiver?

First: What Are Administrative Tax Penalties and When Are They Imposed?

An administrative tax penalty is a sum of money imposed by the Federal Tax Authority on a person for breaching the provisions of the Tax Procedures Law or any of the tax laws. The procedural framework governing it rests on Federal Decree-Law No. 28 of 2022 on Tax Procedures and its Executive Regulation issued by Cabinet Decision No. 74 of 2023, while the value and types of penalties are set by dedicated Cabinet decisions.

The Penalty Framework in Force

The administrative penalty framework was recently recalibrated by Cabinet Decision No. 129 of 2025, effective from 14 April 2026, which replaced the earlier decisions and harmonised the treatment of Value Added Tax and Excise Tax penalties, aligning them with the 2022 Tax Procedures Law. Administrative penalties relating to Corporate Tax remain governed by Cabinet Decision No. 75 of 2023.

Among the most common breaches that may give rise to administrative penalties:

Registration & Deregistration

Late tax registration, or late deregistration once its conditions are met.

Returns & Payment

Late submission of a tax return, or late settlement of the due tax on time.

Errors & Disclosure

Errors in the return, or delay in filing a Voluntary Disclosure to correct them.

Accounting Records

Failure to keep accounting records and books as required by law.

Tax Audit

Failure to enable the Authority or its officers to carry out a tax audit.

Tax Data

Failure to notify the Authority of material changes to data or returns on time.

These penalties are often imposed automatically through the "EmaraTax" platform upon detection of the breach, which makes close attention to the statutory deadlines for appeal decisive.

Second: What Are the Avenues to Appeal a Tax Penalty and Their Deadlines?

The Tax Procedures Law arranges graduated avenues of appeal; as a rule, no stage may be skipped before it has been exhausted. These stages are set out below in sequence:

Stage One: Tax Assessment Review Request

An optional avenue submitted to the Authority where there is a reasonable ground to believe a technical error occurred in applying the tax legislation, a calculation error, or an error in audit procedures leading to an incorrect determination of the tax or penalties. It is filed within 40 business days from the date of notification of the assessment and the related penalties; the Authority decides within 40 business days of receipt and notifies the applicant of the decision within 5 business days.

Stage Two: Reconsideration Request

Submitted to the Authority to object to a decision it has issued, provided it is reasoned and supported by documents, within 40 business days from the date of notification of the decision. The Authority decides within 40 business days of receipt and notifies the applicant within 5 business days. If a Tax Assessment Review was previously submitted, the reconsideration request may only be filed after the Authority issues its decision or the prescribed decision period lapses.

Stage Three: Objection Before the Tax Disputes Resolution Committee

Where the reconsideration request is rejected wholly or partly, an objection may be raised before the Tax Disputes Resolution Committee within 40 business days from the date of notification of the Authority’s decision on the reconsideration request. As a rule, the law requires payment of the due tax before the objection is accepted before the Committee.

Stage Four: Appeal Before the Competent Court

Either party may appeal the Committee’s decision before the competent court within 40 business days from the date of notification of the decision. The Committee’s decisions are final for disputes not exceeding the threshold set by the legislation; otherwise, they are subject to appeal before the judiciary.

The pivotal deadline recurring at each stage:

business days to file each appeal

business days for the Authority to decide

business days to notify the decision

Third: What Are the Conditions and Requirements for an Admissible Appeal?

Adherence to deadlines: Filing the appeal within 40 business days; missing the deadline forfeits the right to appeal at that stage.
Clear reasoning: Stating the grounds of objection precisely (error in applying the legislation, in calculation, or in audit procedures).
Supporting documents: Attaching what supports the objection: invoices, records, correspondence and returns.
Approved channel: Submitting requests through the Authority’s official channels and the "EmaraTax" platform.
Payment before the Committee: The requirement to settle the due tax before the objection is accepted before the Tax Disputes Resolution Committee.
No impermissible combining: As a rule, the Tax Assessment Review and Reconsideration avenues may not be pursued simultaneously on the same point.

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✓ Studying the penalty decision and identifying the most suitable appeal avenue.

✓ Preparing review, reconsideration and committee objection requests.

✓ Following up instalment, waiver and refund requests for penalties.

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Fourth: How Do You Request Instalment, Waiver or Refund of the Penalty?

Alongside the appeal avenues, Cabinet Decision No. 105 of 2021 on the controls and procedures for the instalment, waiver and refund of administrative penalties provides an independent relief mechanism, reviewed by a committee formed by decision of the Chairman of the Board of the Federal Tax Authority. This mechanism comprises three avenues:

1) Instalment of Administrative Penalties

The committee may approve instalment where the following controls are met: the request concerns unpaid penalties only; the penalties to be paid in instalments are not less than AED 50,000 (the committee may amend this amount); the penalties are not the subject of a dispute before the Tax Disputes Resolution Committee, the competent courts or any body concerned with appeals—save for objection through the reconsideration avenue; and there is no tax payable for the tax period subject of the request.

2) Waiver of Penalties (Wholly or Partly)

A person or category of persons may be waived from administrative penalties wholly or partly, according to a percentage or periods determined by the committee, based on satisfying the controls and cases stipulated in the decision. The request is submitted through the Authority’s approved channels, supported by reasons and corroborating documents.

3) Refund of Collected Penalties

Penalties already collected may be refunded according to the cases and rules determined by the committee, typically concerning penalties collected within the five years preceding the date of considering their refund, where the grounds for refund are met.

It is worth noting a prior transitional mechanism that allowed administrative penalties imposed before 28 June 2021 to be redetermined to equal 30% of the total unpaid amount, where specific conditions were met; this is a historical mechanism whose details and temporal application are to be referred to in its own provisions.

Fifth: Practical Tips to Improve the Chances of an Admissible Appeal and Relief

Act before the deadline

Calculate the period from the notification date and file your appeal before 40 business days lapse.

Document everything

Keep records, invoices and correspondence—they are the backbone of a successful appeal.

Correct early

Move promptly to file a Voluntary Disclosure to correct errors before their effects compound.

Choose the right avenue

Distinguish between assessment review, reconsideration, and instalment or waiver requests according to your case.

“The success of a tax appeal does not rest on the merit of the ground alone, but on strict adherence to deadlines and choosing the correct legal avenue from the very first moment.”

— Lawyer Awadh Almheiri

Engaging a lawyer or a specialised tax advisor in drafting the appeal and determining its avenue is therefore an influential step in raising the chances of its admission, especially in complex cases where appeal avenues overlap with instalment or waiver requests.

Legal References

Federal Decree-Law No. 28 of 2022 on Tax Procedures and its amendments — Federal legislation.
Cabinet Decision No. 74 of 2023 on the Executive Regulation of the Tax Procedures Law — Cabinet Decision.
Cabinet Decision No. 129 of 2025 on administrative penalties for violations of tax laws in the State (effective 14 April 2026) — Cabinet Decision.
Cabinet Decision No. 105 of 2021 on the controls and procedures for the instalment, waiver and refund of administrative penalties — Cabinet Decision.
Cabinet Decision No. 75 of 2023 on administrative penalties related to the application of the Corporate Tax Law (for reference) — Cabinet Decision.

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Frequently Asked Questions

What is the period available to appeal a tax penalty?+

Must the penalty be paid before appealing it?+

What is the difference between a Tax Assessment Review and Reconsideration?+

Can the tax penalty be paid in instalments? What is its minimum?+

When can a waiver or refund of the penalty be requested?+

Do I need a lawyer to appeal the tax penalty?+

Do not let a tax penalty turn into a mounting burden; obtain a precise legal assessment of your position and determine the most suitable appeal or relief avenue for your case with a select team of specialists.

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Legal Disclaimer

The information in this article is of a general nature, published for legal education and community awareness, and does not constitute legal advice that dispenses with consulting a specialist. Legal solutions differ according to the facts of each case, its documents, and the legislation in force at the time the dispute arises. AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS bears no responsibility for any action taken on the basis of this content without obtaining dedicated legal advice. We recommend contacting the firm for advice suited to your case. In the event of any discrepancy between this translation and the Arabic text, the Arabic text shall prevail.

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