The short answer
To challenge an FTA penalty or assessment, file a reconsideration request with the FTA within 40 business days of being notified. If that fails, you can object to the Tax Disputes Resolution Committee, then appeal in court. Since 14 April 2026, penalties are lower and late payment accrues at an annualised 14%.
How do I challenge an FTA decision?
Start with a reconsideration request to the FTA, which must normally be filed within 40 business days of the decision; the same 40-business-day standard applies to the later objection stages (PwC summary of Federal Decree-Law No. 28 of 2022). If the FTA keeps its decision, you can object to the Tax Disputes Resolution Committee, and from there appeal to the federal courts, subject to the conditions in the law. Missing a deadline usually makes the decision final, so the clock matters more than the argument at the start.
What makes a reconsideration request succeed?
Evidence that answers the FTA's actual reason, filed in a clear structure. Most penalties we see come from timing (a late registration or return), a document gap or a misread rule. A good request states the facts, the legal basis and the outcome sought, attaches proof such as system logs, bank records or correspondence, and shows any steps already taken to correct the issue. Requests that argue hardship alone rarely succeed.
“The amended law will come into effect on 1 January 2026.”
What changed in the 2026 penalty rules?
Cabinet Decision No. 129 of 2025, in force from 14 April 2026, replaced the old 2% and 4% late-payment penalties with an annualised 14% rate accrued monthly (Al Tamimi). Voluntary disclosures now attract 1% a month on the tax difference, plus a fixed 15% if filed after an audit notice, down from 50%. Several fixed penalties also fell: failing to update your tax record dropped from AED 5,000 to AED 1,000 for a first violation.
When should I file a voluntary disclosure?
As soon as you find an error that changes the tax due, and before the FTA notifies you of an audit. After an audit notice, the fixed 15% surcharge applies on top of the monthly rate (Al Tamimi summary of Cabinet Decision No. 129 of 2025). From 2026 the FTA can also specify which errors that do not change tax due can simply be corrected in a later return (PwC).
How long can the FTA look back?
Five years is the default limit for FTA audits and assessments. Under the amendments in force since 1 January 2026, a refund claimed late in that window can extend the FTA's right to audit that claim by up to two years, and refunds of credit balances must be requested within five years from the end of the relevant period (PwC summary of Federal Decree-Law No. 17 of 2025). Keep records for at least that long.
Frequently asked questions
Do I have to pay the penalty before objecting?
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Generally the disputed tax and penalties must be settled before an objection to the Tax Disputes Resolution Committee, subject to the rules in force. Check the current conditions for your case before you file.
Can a tax agent file on my behalf?
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Yes. An FTA-registered tax agent can prepare and submit reconsideration requests and represent you with the FTA.
What if I missed the deadline?
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Late requests are usually rejected. Some cases allow an extension under the Executive Regulations; ask immediately rather than waiting.
Sources
- UAE Decree-Law amendment on tax procedures (Federal Decree-Law No. 28 of 2022, effective 1 March 2023) — PwC Middle East. Checked 16 October 2026.
- UAE introduces comprehensive tax penalty reform, effective 14 April 2026 (Cabinet Decision No. 129 of 2025) — Al Tamimi & Company. Checked 16 October 2026.
- Ministry of Finance to implement amendments to the Tax Procedures Law starting early 2026 (Federal Decree-Law No. 17 of 2025) — UAE Ministry of Finance, 29 November 2025. Checked 16 October 2026.
- UAE: Significant legislative updates to tax procedures, VAT and excise tax laws (Federal Decree-Laws No. 16 and 17 of 2025) — PwC Middle East. Checked 16 October 2026.
- AED10,000 Penalty for Late Corporate Tax Registration (Cabinet Decision No. 10 of 2024) — UAE Ministry of Finance, 27 February 2024. Checked 16 October 2026.