A penalty notice arrived. The clock started the day it was issued

The date that matters is on the notice, not in your inbox

Article 27 of Federal Decree-Law No. 28 of 2022 gives you 40 business days to ask the Federal Tax Authority to reconsider a decision.

Business days. Weekends and public holidays fall outside the count, which sounds generous until you realise the clock runs from the date of the decision, not the date somebody in your office opened the EmaraTax notification. A notice issued on a Thursday before a long holiday can sit unread for two weeks while a quarter of the window disappears.

Write the deadline down the day the notice arrives. Count business days forward from the decision date on the document itself, and diarise it two weeks early.

What happens if you miss it is simple and unforgiving. The decision stands. There is no discretionary extension for a strong case discovered late, and the merits you never got to argue stay unargued. We are asked to rescue late requests fairly often, and the honest answer in most of them is that the argument needed to exist five weeks earlier.

What the FTA is actually reading

A reconsideration is not an appeal to fairness. It is a request to look again at a decision in light of facts and law.

That distinction decides most outcomes. Submissions that lead with how difficult the year has been, how small the business is, or how the penalty is disproportionate to the error tend to fail, because none of those are grounds. Submissions that show the Authority a fact it did not have, or a provision it applied to the wrong set of facts, tend to succeed.

The four grounds worth building on:

• The facts are wrong. The return was filed, the payment was made, the period is not the one assessed. Prove it with the EmaraTax acknowledgement or the bank value date.
• The law was applied to the wrong facts. The supply was zero-rated, the input tax was not blocked, the place of supply was outside the UAE.
• The calculation is wrong. Arithmetic, the wrong period, or a penalty applied twice for one failure.
• The failure did not occur. The clearest ground of all, and the one that needs the cleanest evidence.

Everything else is context. Context can go in, but it goes at the end, and it never carries the request.

What a submission that works contains

Keep it short and let the annexes do the arguing. Our standard structure runs to about two pages plus evidence.

1. Identify the decision precisely. Reference number, date, TRN, tax type and the exact period. A request that makes the reviewer hunt for what it concerns starts badly.
2. State what you want in one sentence. Cancel the penalty, reduce it to a stated amount, or amend the assessment for a named period.
3. Give the ground. One of the four above, named, not implied.
4. Show the evidence, indexed. Annex A the filing acknowledgement, Annex B the bank confirmation, Annex C the invoice. Reference each annex from the sentence it supports.
5. Deal with the weakness yourself. If a return was genuinely late, say so and confine the request to the part that is actually wrong. Requests that argue everything, including the indefensible, lose credibility on the defensible parts.
6. Close with the correction. What has changed so it does not happen again.

Two mechanical points that sink otherwise good files. Submissions to the Authority are made in Arabic, so the substance needs a legal translation and the translation needs to be right; a mistranslated ground is a different ground. And every figure you assert must reconcile to a document in the annexes. A number that appears only in the narrative reads as an estimate.

The timetable after you file

Once the request is in, the periods are fixed and worth knowing so you can plan around them rather than chase.

End to end, a matter that runs the full course is a several-month exercise, not a several-week one. Plan cash and audit disclosures on that basis.

One thing that does not pause while you wait: the late-payment charge. It runs at 14% a year on unpaid tax, applied monthly, from the day after the tax fell due. If part of the assessment is clearly correct, paying that part early stops the meter on it while you argue the rest.

A worked example, and the part that was actually winnable

A Dubai trading company received an assessment for the quarter ended 31 March 2026: an unfiled return, an incorrect return for the prior quarter, and late payment on AED 90,000 of output tax. Three separate charges on one notice.

The request conceded the first two lines in one sentence each and spent its evidence on the third: bank confirmation showing the value date, the GIBAN reference, and a reconciliation to the assessed figure. Nine days of charge came off, and the two conceded penalties stood.

Two things made it work. Conceding the indefensible lines quickly meant the reviewer reached the real argument on page one rather than page four. And the ground was documentary, not rhetorical: a value date is a fact a bank can confirm, which is a very different thing from asserting that a payment was made on time.

The mistake we see most is the opposite shape. A business disputes all three lines with equal force, offers no document for any of them, and receives a refusal that addresses the weakest argument. Pick the line you can prove. Concede the rest.

The TDRC step, and the condition that surprises people

If the FTA refuses, or does not decide in time, the next stop is the Tax Disputes Resolution Committee at the Ministry of Justice.

Here is the condition that catches businesses out. The Committee will not hear the objection until all tax and penalties have been paid. Not the tax alone. The penalties too, including the ones you are objecting to.

That turns the decision to escalate into a cash decision as much as a legal one. A business disputing a large assessment has to fund the whole amount to be heard, and then wait for the Committee. We have seen sound objections abandoned at exactly this point, which is the strongest practical argument for putting real effort into the reconsideration stage: it is the last step that does not require you to pay first.

The Committee decides within 20 business days of receiving the request, extendable by another 20. Beyond that, both you and the Authority may go to the competent court under the applicable regulations.

Better than winning: not being assessed

Most of the penalties we see were avoidable, and the avoidance was cheap.

The pattern is nearly always the same. An error is found internally, somebody decides to fix it in the next return, and the difference turns out to be above the threshold that required a formal correction. What began as a bookkeeping decision becomes an assessment, and the assessment becomes a reconsideration with a deadline attached.

Correcting it yourself is materially cheaper than being found. A voluntary disclosure filed before the FTA notifies an audit attracts a much smaller charge than the fixed percentage applied once a notification is issued. The mechanics, the AED 10,000 line and the decision tree are in our piece on voluntary disclosures.

Two habits remove most of the exposure. First, file on time even when the money is not there; the late-filing penalty and the late-payment charge are separate, and filing late incurs both. That distinction is set out in the 28th deadline piece. Second, run a standing month-end question: is any prior-period adjustment sitting in this month's journals, and is the tax effect above the disclosure threshold? Dormant companies are not exempt from any of this, as the nil return article sets out.

A reconsideration you never have to file is the cheapest outcome available.