Disputing 14% per annum Late Corporate Tax Payment Penalty: Reasonable excuse

UAE penalty law does not contain a general 'reasonable excuse' defence by name, but in practice the FTA and the Committee weigh the circumstances behind late corporate tax payment. A reasonable excuse argument says: the violation happened, but it happened for reasons beyond your control despite reasonable care. It is a mitigation argument, not a denial — so it sits alongside, not instead of, your factual grounds.

Circumstances that carry weight include serious illness or death of the person responsible for compliance, a documented EmaraTax outage on the deadline, destruction of records by fire or flood, and reliance on written FTA guidance that turned out to be wrong. Circumstances that do not include being busy, changing accountants, or not knowing the law.

Raise reasonable excuse inside the reconsideration request as a secondary ground: primary grounds attack the assessment (the due date used in the computation is wrong (standard 9-month vs 20-business-day rule)), and the excuse explains any residual delay the primary grounds do not cover. At the TDRC, the same structure applies — committees are human, and a documented excuse can tip a borderline computation case.

If the excuse explains everything — say, the portal was down on the deadline and you filed the next morning — lead with the facts and keep the excuse short. If it explains little, do not let it crowd out stronger grounds.

File the reconsideration within 40 business days of notification, attach the excuse evidence as its own tab, and keep the tone factual. The FTA decides in 40 business days and notifies in 5; refusal leads to the TDRC within 40 business days with tax paid in full.

If the deadline is close or the amount is large, get help before you file. Call +971 58 541 4616, message us on WhatsApp at https://wa.me/971585414616, email info@taxadvisors.ae, or use the contact form at /contact/.

Reviewers apply a practical test to reasonable-excuse claims on late corporate tax payment penalties, and knowing it shapes the file. First, was the event genuinely outside your control — a hospital admission, a natural disaster, a documented portal outage — rather than a consequence of your own disorganization? Second, is there contemporaneous proof: a medical certificate dated during the default period, not a letter written months later? Third, did you act promptly once the obstacle lifted — the excuse explains the delay, it does not license indefinite inaction. Fourth, is this a pattern? A first default with a credible excuse reads very differently from the third default with a new story each time. The 14% per annum penalty is not excused by the excuse alone but by the excuse plus the proof plus the prompt correction. Frame the claim around those four points and the reviewer can follow your reasoning to 'yes'. Where the excuse involves a third party — a bank error, a portal outage, an agent's failure — get that party's written confirmation; your assertion about someone else's failure carries little weight without their corroboration.