# How to submit a penalty instalment request to the FTA in the UAE

> Learn how to submit a penalty instalment request to the UAE Federal Tax Authority, including eligibility, required documents, and step-by-step

Source: https://einvoicedirect.ae/fta-compliance-uae/penalty-instalment-request-uae  
Last updated: 2026-06-05  
Publisher: EInvoice Direct (Massive FZCO), UAE e-invoicing software.

## What is a penalty instalment request in the UAE?

A penalty instalment request is a formal application to the Federal Tax Authority (FTA) asking to pay an outstanding tax penalty in scheduled portions rather than a single lump sum. The FTA may approve such requests under Federal Decree-Law 17 of 2024 on tax procedures when a taxpayer can demonstrate genuine financial hardship or other valid grounds. Approval is discretionary, not automatic.

If you are managing broader [FTA compliance in the UAE](https://einvoicedirect.ae/fta-compliance-uae), understanding how instalment plans work can help you avoid enforcement escalation while keeping your business operational.

## Legal basis for penalty instalment plans

The FTA's authority to grant instalment arrangements sits within the UAE's tax procedures framework. Several legal instruments are relevant.

### Key legislation

- **Federal Decree-Law 17 of 2024** (tax procedures): sets out the FTA's powers to collect penalties and agree payment terms.

- **Federal Decree-Law 16 of 2024** (VAT amendment): updates penalty provisions linked to VAT obligations.

- **Cabinet Decision 106 of 2025**: specifies penalty amounts ranging from AED 2,500 to AED 50,000 per violation for various tax offences.

The FTA can accept, reject, or modify an instalment proposal. It may also revoke an approved plan if the taxpayer misses a scheduled payment.

### Types of penalties eligible for instalments

Not every penalty qualifies. The FTA generally considers instalment requests for administrative penalties rather than penalties linked to fraud or deliberate evasion. Common eligible penalties include:

- Late VAT return filing penalties.

- Late payment penalties on outstanding VAT or corporate tax.

- Penalties for failure to maintain proper records.

- Penalties arising from errors corrected through a [voluntary disclosure for UAE taxes](https://einvoicedirect.ae/fta-compliance-uae/voluntary-disclosure-uae-all-taxes).

If you believe the penalty itself was issued in error, you should first consider an [FTA reconsideration request](https://einvoicedirect.ae/fta-compliance-uae/fta-reconsideration-request-uae) before applying for an instalment plan.

## Eligibility criteria for a penalty instalment request

The FTA evaluates each request on its own facts. While no published checklist exists, the authority typically looks at several factors.

| Factor | What the FTA considers |
| --- | --- |
| Total penalty amount | Higher amounts are more likely to qualify because the financial burden is greater. |
| Payment history | A clean record of prior tax payments strengthens the case. |
| Financial hardship evidence | Bank statements, cash-flow forecasts, or audited accounts showing inability to pay in full. |
| Outstanding returns | All tax returns must be filed and up to date before the FTA will consider an instalment plan. |
| Previous instalment requests | Repeated requests or prior defaults weaken the application. |
| Cooperation level | Prompt responses to FTA queries and voluntary disclosures reflect positively. |

## Step-by-step process to request a penalty instalment plan

The process runs through the FTA's online portal at [tax.gov.ae](https://tax.gov.ae). Below is a practical walkthrough.

### Step 1: Confirm the penalty and amount

Log in to your FTA account. Navigate to the "Penalties" or "My Payments" section. Verify the penalty reference number, violation type, and total amount due. Make sure you agree the penalty is valid. If you dispute the penalty itself, file a reconsideration first.

### Step 2: Prepare supporting documents

Gather the following before you start the application:

- A cover letter explaining why you cannot pay the full amount immediately.

- Recent bank statements (typically the last 3 to 6 months).

- Cash-flow projections showing how you will meet each instalment.

- A proposed payment schedule with specific amounts and dates.

- Trade licence and Tax Registration Number (TRN).

- Any correspondence from the FTA about the penalty.

### Step 3: Submit the request

Use the FTA portal's instalment request form. Attach all documents. Specify the number of instalments you are proposing and the amount per instalment. Be realistic. Proposing too many instalments over too long a period may lead to rejection.

### Step 4: Await the FTA's decision

The FTA does not publish a guaranteed turnaround time for instalment decisions. In practice, responses typically arrive within 20 to 40 business days. You may receive a request for additional information during this period.

### Step 5: Comply with the approved schedule

If approved, the FTA will issue a payment schedule. Each instalment must be paid on or before the due date. A missed payment can void the entire arrangement, making the full remaining balance due immediately.

## Penalty amounts under Cabinet Decision 106 of 2025

Understanding the scale of penalties helps you decide whether an instalment plan is worth pursuing. Below is a summary of the penalty range.

| Violation category | Penalty range (AED) |
| --- | --- |
| Minor administrative violations | AED 2,500 per violation |
| Repeated or serious violations | Up to AED 50,000 per violation |
| Late payment penalties | Calculated as a percentage of unpaid tax, compounding over time |

Penalties can accumulate quickly. A business with multiple violations may face a combined liability well above AED 100,000, making an instalment arrangement a practical necessity.

## Tips to strengthen your instalment request

- **File all outstanding returns first.** The FTA will not negotiate payment terms while returns are overdue.

- **Pay what you can upfront.** Offering a partial payment with your application shows good faith.

- **Keep the proposed schedule short.** Plans of 6 to 12 months are more likely to be accepted than plans stretching over several years.

- **Be transparent.** Provide complete financial records. Omissions raise suspicion.

- **Correct errors proactively.** If the penalty arose from a reporting mistake, submit a [voluntary disclosure with correct timing](https://einvoicedirect.ae/fta-compliance-uae/voluntary-disclosure-uae-timing) to demonstrate compliance intent.

## What happens if the FTA rejects your request?

Rejection is not the end. You have several options.

- **Resubmit with stronger evidence.** Address the FTA's specific objections and provide additional documentation.

- **Apply for a penalty waiver.** If you have grounds, explore [penalty waiver options in the UAE](https://einvoicedirect.ae/fta-compliance-uae/penalty-waiver-uae-grounds) as an alternative.

- **Escalate to the Tax Dispute Resolution Committee.** If you believe the penalty itself is unjust, you can take the matter to the [UAE Tax Dispute Resolution Committee](https://einvoicedirect.ae/fta-compliance-uae/uae-tax-dispute-resolution-committee) after exhausting the reconsideration process.

- **Pay in full.** If no other avenue succeeds, settling the penalty avoids further enforcement action and additional late-payment charges.

## Instalment plans and ongoing compliance obligations

An approved instalment plan does not pause your other tax obligations. You must continue to file VAT returns within 28 days of each period end and corporate tax returns within 9 months of your financial year end. New penalties incurred during an active instalment plan can void the arrangement.

Staying current with all filings is essential. For a broader view of your obligations, review the [FTA compliance hub for UAE businesses](https://einvoicedirect.ae/fta-compliance-uae).

If your business needs to streamline tax compliance and reduce the risk of penalties, [get UAE e-invoicing pricing](https://einvoicedirect.ae/for-businesses#contact) to see how EInvoice Direct can help you stay on track.

## Frequently asked questions

### Can I pay FTA penalties in instalments in the UAE?

Yes, the FTA allows taxpayers to request instalment payment plans for administrative penalties. Approval is discretionary and depends on factors such as the penalty amount, your payment history, and evidence of financial hardship. You must submit a formal request through the FTA portal with supporting documents.

### How do I apply for a penalty instalment plan with the FTA?

Log in to your account at tax.gov.ae. Locate the penalty in your dashboard, then submit an instalment request form. Attach a cover letter, bank statements, cash-flow projections, and a proposed payment schedule. The FTA will review your application and respond, typically within 20 to 40 business days.

### What documents are needed for an FTA penalty instalment request?

You generally need a cover letter explaining your financial situation, 3 to 6 months of bank statements, cash-flow forecasts, a proposed repayment schedule, your Trade Licence, and your Tax Registration Number. Any prior FTA correspondence about the penalty should also be included.

### What happens if I miss a payment on my FTA instalment plan?

Missing a scheduled payment can void the entire instalment arrangement. The FTA may then require immediate payment of the full remaining balance. Additional late-payment penalties may also apply. Contact the FTA promptly if you anticipate difficulty meeting a due date.

### Can I request an instalment plan and a penalty waiver at the same time?

You can pursue both, but they serve different purposes. An instalment plan spreads payment over time, while a waiver reduces or eliminates the penalty. If you have grounds for a waiver, it is usually better to apply for that first. If the waiver is partially granted, you can then request instalments for the remaining amount.

### How long does the FTA take to approve a penalty instalment request?

The FTA does not publish a guaranteed processing time. Based on common experience, decisions typically arrive within 20 to 40 business days. Complex cases or requests requiring additional documentation may take longer. The penalty remains due during the review period.

### What is the maximum number of instalments the FTA allows?

The FTA does not publish a fixed maximum. Each case is assessed individually. Shorter plans of 6 to 12 months are generally more likely to be approved. Proposals stretching beyond 12 months may face greater scrutiny or rejection.

### Can I appeal if the FTA rejects my instalment request?

You can resubmit with stronger supporting evidence addressing the FTA's objections. If you dispute the underlying penalty, you may file a reconsideration request and, if that fails, escalate to the UAE Tax Dispute Resolution Committee. Alternatively, you can explore penalty waiver grounds.


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