Corporate tax in UAE has the lowest tax rate in the world. The regulations are relatively simple, but there is something that is not that cool: the tax crime penalties.

Article 25 of the Tax Procedures Law deals with more serious cases, where penalties for tax crimes may apply.
Without prejudice to any more severe penalty applicable under any other Law, a prison sentence and/or a monetary penalty not exceeding three(3) times the amount of the evaded tax shall be imposed for:

  • Deliberately understating the actual value of revenues or failing to consolidate related businesses, with the intention of remaining below the relevant registration threshold, tax rate or other tax thresholds.
  • Deliberately imposing and collecting amounts as tax without being registered.
  • Deliberately failing to settle any payable tax.
  • Deliberately decreasing the due tax or participating in any form of tax evasion.โ€จDeliberately committing or omitting any other act which may constitute taxโ€จevasion under the Law or the Tax Law.
    [Art. 25.2 of the Tax Procedures Law]

A prison sentence and/or a monetary penalty not exceeding AED 1,000,000 shall be imposed on anyone who commits any of the following acts:
Deliberately providing false information, data and incorrect documents to The Authority.

  • Deliberately concealing or destroying documents, information and data or other material that he is required to keep and provide to The Authority.
  • Stealing documents or other materials that are in the possession of The Authority or deliberately misusing or destroying them.
  • Deliberately preventing or hindering The Authority’s employees’ from performing their duties.
    [Art. 25.4 of the Tax Procedures Law]
  • Facilitating or concealing tax evasion carries the same penalties. [Art. 25.5 of the Tax Procedures Law]
  • Tax Crime penalties apply for deliberate acts. Accidental omissions, delays or oversights, if penalised, would fall within the administrative penalties regime.
  • Note that a taxable person committing tax evasion which includes falsifying information submitted to The Authority may receive a tax-related penalty of up to three times the evaded tax, a prison sentence and also a further penalty of up to AED 1,000,000. [Art. 25.4 and 25.5 of the Tax Procedures Law]