TaxSavvyAE

Late VAT payment under the 2026 rules

I paid my VAT two months late. How is the penalty worked out now?

The situation

From 14 April 2026, late payment of VAT attracts a penalty of 14 percent a year, charged monthly on the unpaid tax. It replaced the old 2 percent and 4 percent penalties.

The law

  • Cabinet Decision 129 of 2025 (from 14 April 2026): Revised VAT and excise penalties, including 14 percent a year late payment

What it means for you

Example: VAT of AED 50,000 paid two months late. At 14 percent a year, about 1.17 percent a month, the penalty is around AED 1,170. Under the old rules it could have been several thousand. Pay as soon as possible because the penalty runs monthly.

What to do

  1. Pay the outstanding VAT now.
  2. Check the penalty posted in EmaraTax.
  3. Keep proof of payment date.
  4. Schedule payment before the 28th next time.

We can do this for youVAT return filing (VAT201) on EmaraTax: output and input VAT, reverse charge, corrections and payment: AED 850

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