EU AI Act fines for small businesses: the three tiers and the SME 'lower amount' rule

Last updated 20 Oct 2026 · European Union

Short answer. Article 99 of the EU AI Act (Regulation (EU) 2024/1689) sets maximum fines in three tiers. Banned AI practices (Article 5): up to €35 million or 7% of worldwide annual turnover. Most other operator duties: up to €15 million or 3%. Giving authorities wrong or misleading information: up to €7.5 million or 1%. For large firms the cap is whichever amount is higher. For SMEs, including start-ups, it is whichever is lower (Article 99(6)). Member States set the actual penalty rules and enforce them.

The tiers

Breach	Maximum	SME cap
Prohibited practices (Art. 5)	€35m or 7%, whichever higher	Whichever lower
Obligations of providers, authorised representatives, importers, distributors and deployers, and transparency duties (Art. 50)	€15m or 3%	Whichever lower
Incorrect, incomplete or misleading information to authorities or notified bodies	€7.5m or 1%	Whichever lower

Worked example (illustration, not a prediction)

An SME with €2 million worldwide turnover breaches a deployer duty. 3% of turnover = €60,000; the fixed amount is €15 million. For an SME the lower figure applies, so the maximum is €60,000. The actual fine depends on the factors below and can be far less.

What authorities must weigh (Art. 99(7))

Nature, gravity and duration of the breach, and how many people were affected
Whether it was intentional or negligent
Action taken to reduce harm, and cooperation with the authority
Size, annual turnover and market share of the operator
Previous fines for the same conduct

Fines on providers of general-purpose AI models are set by the Commission under Article 101.

Cheap ways to lower your exposure

Keep an AI inventory showing which systems you use and in what role (template)
Check nothing you use is a banned practice (Article 5 list)
Meet the Article 50 chatbot and AI-content transparency duties, which already apply
Log incidents and complaints (log)

Regulation (EU) 2026/1744 amended parts of the AI Act, including dates for the high-risk rules. Read Article 99 in the current consolidated text on EUR-Lex.

Frequently asked questions

What is the maximum EU AI Act fine?

€35 million or 7% of worldwide annual turnover, whichever is higher, for prohibited AI practices under Article 5.

Are fines lower for SMEs under the EU AI Act?

Yes. For SMEs including start-ups, each fine is capped at the lower of the fixed amount and the turnover percentage (Article 99(6)).

Who enforces EU AI Act fines?

National market surveillance authorities under penalty rules set by each Member State; the Commission fines providers of general-purpose AI models under Article 101.

What reduces an EU AI Act fine?

Authorities consider gravity, duration, intent or negligence, mitigation, cooperation, size and turnover, and previous infringements (Article 99(7)).

Official sources

Not tax or legal advice. This is a free explainer of public rules; deadlines and rules can change by notification, so confirm on the official portal or with your CA before you file. Last checked 20 Oct 2026.

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