EU AI Act answers · Penalties
EU AI Act penalties: the fines and the SME cap
Three tiers of fine, and a cap that matters to small business: for SMEs, including start-ups, each fine is capped at the lower of the two figures in its tier. Correct as of 3 August 2026.
Recitals 168 and 169 of Regulation (EU) 2024/1689 record the ceilings. Member States set and apply their own penalty rules within them. ComplianceSME's free EU AI Act checker tells you in one minute which duties you carry, which is the part of this page you control.
The three tiers
| Breach | Ceiling | SME position |
|---|---|---|
| Article 5 prohibited practices | EUR 35,000,000 or 7% | Capped at the lower figure |
| Other operator breaches | EUR 15,000,000 or 3% | Capped at the lower figure |
| Incorrect, incomplete or misleading information to authorities | EUR 7,500,000 or 1% | Capped at the lower figure |
Percentages are of total worldwide annual turnover for the preceding financial year. For businesses other than SMEs, each tier applies at whichever figure is higher.
In practice
The highest tier attaches to the Article 5 prohibitions, which have applied since 2 February 2025. They include AI systems that infer the emotions of a person in the workplace except for medical or safety reasons. The third tier is the one businesses forget: supplying incorrect or incomplete information to an authority is its own breach. Documentation you can stand behind is the defence, and producing it is what a ComplianceSME system is for.
Know your duties first
The checker builds your duty card free in one minute. The EU AI Act system, B-001, then carries the whole of Regulation (EU) 2024/1689 in one run and produces your compliance documentation with article citations.
Run the free checker See the EU AI Act systemMore answers: We use ChatGPT at work · The Article 4 AI literacy requirement · The current deadlines