Input tax credits allow businesses to claim input tax credits for purchases or expenditures related to the production of taxable items or business activities. Although you can claim most purchases and expenses, some expenses are not deductible. Oman’s VAT regulations determine which expenses are not…
In the previous article, we discussed the administrative penalties (commonly referred to as VAT penalties) applicable under the Federal VAT Act. In addition to these administrative penalties, the Federal Tax Procedure Act also defines certain violations and their corresponding penalties. These will also have an impact on those who register under VAT in the UAE. Let us discuss these violations and their corresponding administrative penalties under UAE VAT.
Violation of Administrative Penalty (AED)
1. The operator failed to keep the required records and other information in accordance with the “Tax Law” and “Tax Law 10,000” for the first time
50,000 if repeated
2. Business personnel failed to submit tax data, records and documents related to Arabic to the free trade agreement as required 20,000
3. The taxable person fails to submit an application for registration within the time limit specified in the Tax Law 20,000
4. The registrant fails to submit a cancellation application within 20 working days after the occurrence of an event that requires cancellation 10,000
5. The registrant has failed to notify the FTA of any circumstances that need to modify the information in the tax records first saved by FTA 5,000
15,000 repetitions
6. The person appointed as the legal representative of the taxable person fails to notify the FTA of his appointment within 20 working days from the date of appointment. The fine will come from the legal representative’s funds of 20,000
7. The legal representative designated as the taxpayer fails to submit the tax return within 28 months after the end of the tax period. The fine will come from the legal representative’s funds 1,000 for the first time
If repeated within 24 months, 2,000
8. The registrant fails to file the tax return for the first time within 28 days of the second month after the end of the tax period
If repeated within 24 months, 2,000
9. The taxable person fails to settle the tax payable within 28 days of the second month after the end of the tax period in the tax return submitted or tax assessment notified to him/her
a. 2% of unpaid taxes, due immediately after the due date
b. 4% of unpaid taxes should be paid on the 7th day after the payment deadline
c. From one calendar month after the payment deadline, a daily fine of 1% will be imposed on unpaid taxes, up to a maximum of 300% of unpaid taxes
10. Submitting wrong tax returns will be subject to two penalties:
Fixed penalty: 3,000 for the first time
5,000 if repeated
b. Percentage-based fines: If the registrant fails to voluntarily disclose after being notified of the tax audit and the audit process or after being required to provide information about the tax audit, 1.50% of the unpaid amount shall prevail. If the registrant voluntarily disclosed after receiving the tax audit notice and before the free trade agreement starts the tax audit, it will account for 2.30% of the unpaid amount. If the registrant voluntarily disclosed before the FTA notified the tax review, 3.5% of the unpaid amount
11. Taxpayers voluntarily disclose tax returns, and errors in tax assessment or tax refund applications are the same as above
12. If the taxable person fails to voluntarily disclose his tax return before notifying him that he will undergo a tax audit, the following two penalties will apply to errors in tax assessment or refund application:
Fixed penalty:
3,000 for the first time
5,000 if repeated
b. 50% of the unpaid amount
13. People engaged in business activities fail to facilitate the work of tax auditors 20,000
14. The registrant fails to pay taxes on behalf of others, even though he/she is obligated to do so
a. 2% of unpaid tax, once the tax deadline has passed
b. 4% of unpaid taxes should be paid on the 7th day after the payment deadline
c. From one calendar month after the payment deadline, a daily fine of 1% will be imposed on unpaid taxes, up to a maximum of 300% of unpaid taxes
15. Those who do not pay the tax payable for imported goods have not paid or failed to declare 50% of the tax
Obviously, violations and violations under VAT will attract strict measures in the UAE. Taxpayers should ensure that they avoid the above-mentioned violations of the law, so as not to suffer huge fines if they do not comply with the regulations.
Goods misplaced, broken or stolen is a not unusualplace situation that companies come across. No remember how sturdy is your items managing manner or protection structures in place, conditions of harm or robbery continues occurring. It`s no brainer that it consequences in an instantaneous loss…
All businesses domiciled in Oman whose supplies exceed OMR 38,500 in the past 11 months and the current month are subject to compulsory tax credit under Oman VAT. You need to register. Let’s also assume that the company expects its total deliveries for the current…
Invoice Issuance is one of the important aspects of business. Regarding VAT, all registered businesses must follow the guidelines set out in the invoicing legislation. If you are a company making taxable supplies, you will need to ensure that a tax invoice is issued. Additionally,…
Corporate tax is an income tax levied on a company’s income. In Saudi Arabia, only non-Saudi companies are subject to corporate tax. If a company is owned by both Saudi and non-Saudi owners, the portion of taxable income attributable to the non-Saudi interests will be…
A brief explanation of how corporate tax is calculatedThe application of corporate tax in the UAE is seen as a competitive advantage, especially for foreign investments. As such, paying corporate tax may be more beneficial for business owners than paying additional personal income tax. .…
The UAE corporate tax announced by the UAE Ministry of Finance on 31 January 2022 is considered the lowest corporate tax rate among the GCC countries. The corporate tax rate in the United Arab Emirates is 9%. Additionally, certain corporate segments and income are exempt…
What is the UAE Free Trade Agreement? FTA stands for UAE Federal Tax Authority. It is the government agency responsible for administering, collecting and enforcing federal taxes and related penalties, as well as distributing tax revenues and applying tax-related procedures in the UAE. The Federal…
Omani companies can raise finance through debt or company equity. Income taxes are not levied by the government on: Dividends from a sole proprietorshipReceipt of dividends by a company from the shares of another company registered in OmanWithholding tax (WHT) applies (depending on the relevant…
The implementation of the first phase (generation phase) of e-invoicing in Saudi Arabia begins on December 4, 2021 and is subject to the e-invoicing regulation Applies to all taxpayers. This first phase requires all compliant businesses to create and store electronic invoices with specific specifications…