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VAT Penalties in UAE

Federal Tax Procedures Law and Federal Decree-Law on VAT provide for VAT penalties / VAT Administrative Penalties in UAE.

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VAT Penalties in UAE

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  1. VAT Penalties in UAE VAT Penalties in UAE Federal Tax Procedures Law and Federal Decree-Law on VAT provide for VAT penalties / VAT administrative penalties in UAE. Every business in the UAE must be familiar with VAT Laws and comply with its provisions to contribute towards the nation’s growth and avoid VATpenalties.

  2. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE Violations and administrative penalties related to the implementation of the Federal Law No. (7) of 2017 on tax procedures: 1. Failure to keep the required records and other information specified in the Tax Law: AED 10,000 for the first time • AED 50,000 in case of repetition •

  3. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 2.Failure tosubmit the data,records, and documents related toTaxin Arabic to the Federal TaxAuthority when requested: • AED 20,000 3. Failure to submit a registration application within the specified timeframe: • AED 20,000 4. Failure of the registered business tosubmit a deregistration applicationwithin the specified timeframe: • AED 10,000

  4. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 5. Failure of the registered business to inform the FTA of any circumstance that requires the amendment of the information pertaining tohis tax record kept by the Authority: AED 5,000for the first time • AED15,000 in case of repetition • 6. Failure of the person appointed as a legal representative for the taxable person to inform the Authority of his appointment within the specified timeframe. This penalty will be due from the legal representative’s own funds: AED 20,000 •

  5. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 7. Failure of the person appointed as a legal representative for the taxable person to file a Tax Return within the specified timeframe. The penalty will be due from the legal representative’s own funds: AED 1,000 for the first time AED 2,000 in case of repetition within (24)months • • 8. Failure of the Registrant to submit the tax return within the timeframe specified in the tax law: AED 1,000 for the first time AED2000 in case of repetition within (24) months • •

  6. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 9. Late payment penalty (Payable Tax stated in the submitted tax return or tax assessment): 2% of unpaidtax is dueimmediately • 4% is due on the seventh day following the deadline for • payment 1% daily penalty on any amount that is still unpaid one calendar • month following the deadline for payment (max 300%)

  7. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 10. Incorrect tax return by the taxable business. Two penalties are applied: • Fixed Penalty Fixed Penalty • • AED 3,000 for the first time • AED 5,000 in case of repetition % Based Penalty % Based Penalty % based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows: • 50% if the registered business does not make a voluntary disclosure or he makes the disclosure after being notified of the tax audit, and the Authority has started the tax audit process, or after being asked for information relating to the tax audit, whichever takes place first 30% if the registered business makes the voluntary disclosure after being notified of the tax audit and before the Authority starts the tax audit 5% if the registered business makes a voluntary disclosure before being notified of the tax audit by the Authority • • •

  8. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 11. The voluntary disclosure by the person/taxpayer of errors in the tax return, tax assessment, or refund applicable pursuant to Article 10 (1) and (2) of the Tax Procedures Law. Two Penalties are applied: Fixed FixedPenalty Penalty •AED3,000for thefirsttime •AED5,000incaseof repetition • % % Based BasedPenalty %based penaltyshall be appliedon theamountunpaidtotheAuthorityduetotheerrorand resultinginataxbenefitasfollows: • 50% if the Person/Taxpayer make as voluntary disclosure after being notified of the tax audit and Authority starting the tax audit or after being asked for information relating to the tax audit, whichever takes place first • 30% if the Person/Taxpayer makes the voluntary disclosure after being notified of the tax audit but before the start of the tax audit • 5% if the Person/Taxpayer makes a voluntary disclosure before being notified of the tax audit by the Authority. Penalty •

  9. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 12. The failure of the Taxable Person to voluntarily disclose errors in the tax return, tax assessment or refund application pursuant to Article 10 (1) and (2) of the Tax Procedures Law before being notified that he will be subject toa tax audit. Twopenalties are applied: Fixed FixedPenalty Penalty • AED 3,000 for the first time •AED 5,000 in case of repetition % % Based BasedPenalty Penalty • 50% of the amount unpaid to the Authority due to the error resultingin a tax benefit for the person/Taxpayer

  10. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 13. The failure of the business conducting business to facilitate the work of Tax Auditor the provisionsof Article (21)of the TaxProcedures Law: • AED 20,000 14. The failure of the Registrant to calculate tax on behalf of another person when the registered taxable person is obliged to do so under the Tax Law. The Registrant shall be obliged topaya late penalty consisting of: •2% of the unpaidtax dueimmediately once the payment of payable tax is late • 4% is due on the seventh day following the deadline for payment, on the amount of tax which is unpaid • 1% daily penalty charged on any amount that is still unpaid one calendar month following the deadlinefor payment with an upper ceiling of 300%

  11. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE 15. A person not accounting for any tax that may be due on the import of goods as required under the law: 50% of unpaid or undeclared tax 50% of unpaid or undeclared tax • Violations and administrative penalties related to the implementation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT): Failure by the Taxable Person to display price inclusive of Tax: Failure by the Taxable Person to display price inclusive of Tax: • AED 15,000 Failure by the Taxable Person to notify the Authority of applying tax based on Failure by the Taxable Person to notify the Authority of applying tax based on margin: margin: • AED 2,500

  12. VAT Administrative Penalties in UAE VAT Administrative Penalties in UAE • Failure to comply with conditions and procedures related to keeping the goods in a DesignatedZoneormovingthemtoanotherDesignatedZone: The penalty shall be the higher of AED 50,000 or 50% of the tax if any, chargeableinrespectof thegoodsastheresultoftheviolation Failure by the Taxable Person to issue the Tax Invoice or an alternative document when makinganysupply: • AED5,000foreachtaxinvoiceoralternativedocument: FailurebytheTaxablePersontoissueaTaxCreditNoteoranalternativedocument: • AED 5,000 for each tax credit note or alternative document Failure by the Taxable Person to comply with the conditions and procedures regarding the issuance of electronicTaxInvoicesandelectronicTaxCreditNotes: AED5,000foreachincorrectdocument

  13. VAT Services in UAE VAT Services in UAE N R Doshi & Partners is a Registered Tax Agent with the Federal Tax Authority in UAE. We provide VAT Consulting Service, which complements our other services, including, Company Formation, Advisory Services, Accounting and Finance, and Outsourcing. It enables us to provide a total solution to our clients sothattheycanremaincompliantandavoidVATpenalties. Our VAT Consulting Service offers easy access to VAT experts who are experienced in your industry and provide a practical solution. They also handle your routine compliance issues starting from VAT Registration, VAT-compliant Bookkeeping, VAT Return Filing, VAT Implementation, Voluntary Disclosure Filing,VATAudit,TaxAgentServices,TRNVerification,andVATDe-registration. Our VAT Services in UAE aims to provide the expertise you need to deal with UAE VAT Laws. Contact Contact Us Us now to proceed towards the right direction in your journeyof VATComplianceandavoidingVATPenalties.

  14. THANKS FOR WATCHING!!!

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