How to Appeal a Tax Penalty in the UAE: Complete Guide?
Is Your Company at Risk of a Tax Penalty from the Federal Tax Authority (FTA) in the UAE? Most violations of the UAE’s VAT, Corporate Tax, and/or Excise Tax laws result in the Federal Tax Authority (FTA) issuing the company an administrative penalty and an FTA tax assessment for non-compliance with UAE tax laws.
This article explains the official process under Federal Decree-Law No. 28 of 2022 on Tax Procedures (as amended), based on the latest FTA and UAE Government guidance.
Understanding Tax Penalties and Your Right to Appeal
The FTA imposes administrative penalties for offences such as failing to register, filing returns late, making incorrect tax calculations, failing to keep records, and other tax violations.
The penalties may be fixed sums (which vary between AED 500 and AED 20,000 according to the nature of the violation and whether it is the offender’s first or subsequent offence) or be calculated as a percentage of the tax owed, provided that statutory maximums set out in the Tax Procedures Law are not exceeded.
It is possible to appeal both the tax assessment and the accompanying administrative penalties. The main legislation in this case is the Federal Decree-Law No. 28 of 2022 Concerning Tax Procedures. The official government portals provide for a three-tier process for appealing the penalty:
- internal reconsideration by the FTA,
- appeal before the Tax Disputes Resolution Committee (TDRC) under the Ministry of Justice, and
- (where applicable) an appeal before the appropriate court.
Step 1: Reconsideration Request to the FTA
This is the first and most crucial step for most penalties. Article (29) of the Federal Decree-Law No. 28 of 2022 on Tax Procedures allows Persons to submit a reconsideration request on any decision issued by the Federal Tax Authority (FTA) in whole or in part.
To be eligible, applicants must fulfil the following conditions:
- Submit a reconsideration request in Arabic, citing justifications.
- Submit the application within 40 business days from the date of the FTA decision.
- The request must be submitted by the concerned person or his legal representative.
Deadline: Within 40 business days of receiving notification from the FTA about their decision. In certain cases (such as a serious illness or death of the authorised signatory), an extension could be granted under FTA Decision No. 1 of 2025.
Payment: You don’t need to pay the disputed amount of tax and penalties to make the request. However, the unpaid amounts will attract additional costs, which is why some people prefer paying the disputed amounts under protest.
Filing on EmaraTax:
- Access the FTA portal through UAE Pass or a registered account.
- Go to Taxable Person Profile → Other Services → Reconsiderations → New Request.
- Enter the reference number of the FTA decision.
- Choose the appropriate category and describe errors.
- Attach all necessary documents.
Who can file:
- the taxpayer,
- a registered Tax Agent, or
- Legal Representative.
Required documents: The original FTA decision and supporting evidence, such as invoices, contracts, bank statements, correspondence, or evidence from the system (formats: PDF, Word, Excel, or picture; maximum 5 MB per document).
Response from the FTA: up to 45 business days, extendible. You will be notified within 5 business days after the decision.
Strong grounds are factual errors, miscalculations, incorrect application of the law, or evidence that the violation did not take place.
Step 2: Tax Disputes Resolution Committee (TDRC)
If the FTA rejects your request or takes more time to make a decision, you may appeal to the independent TDRC under the Ministry of Justice.
Deadline: 40 business days after the FTA decision or expiry of the FTA decision period.
Key requirements: You need to have filed the previous reconsideration application and pay the total disputed tax.
The Committee usually makes its decisions within 20 business days (extendable for another 20 business days). Decisions on disputes involving a total amount of taxes and penalties of up to AED 100,000 are final. Higher amounts may be brought before the court.
Step 3: Court Appeal
If the dispute exceeds the AED 100,000 limit, both parties could appeal against the decision of TDRC to the competent Federal Court within 40 business days. It requires the full payment of the disputed tax and at least 50% of the administrative penalties or a bank guarantee.
Important Note: A current FTA waiver provision allows a late Corporate Tax registration penalty waiver if the filing of the tax return (or the annual return of exempt persons) is made within seven months following the end of the first tax period. However, this is a different provision from the one explained above, and it does not replace the formal appeal process explained above.
Practical Tips
- Write down the deadlines of 40 business days right away.
- Gather specific evidence before filing the appeal.
- Make sure all your issues of compliance are resolved (tax return filing, for example) to be stronger in your appeal.
- Do not confuse reconsideration (appeal against the validity of the penalty imposed) and limited waivers.
- Visit the EmaraTax often for new information.
How HH and Hale May Assist You?
Meeting the FTA deadlines, preparing well-supported Arabic submissions, and obtaining the appropriate evidence can all be difficult when time is limited. HH and Hale, who specialise in assisting with tax disputes in the UAE, can assist you at every stage.
Our Tax consultants in Dubai can:
- Review your penalty notice and identify the strongest legal and factual grounds
- Draft and file a complete reconsideration request on EmaraTax within the 40-business-day window
- Prepare supporting documentation and evidence packages
- Handle escalation to the Tax Disputes Resolution Committee if needed
- Advise on payment requirements, bank guarantees, and next steps for court appeals
- Guide you on related penalty waiver options where applicable
We are experienced Tax consultants who are well familiar with the present FTA procedures and TDRC requirements. Get in touch with HH and Hale today to have your case assessed confidentially so that you can take action before the important deadlines expire.