Understanding any tax system requires familiarity with its specific language and terminology. This terminology encompasses essential terms commonly used in the administration and management of taxes, each representing a distinct concept or legal definition. Proficiency in these terms streamlines the comprehension of tax regulations and…
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.
With the impending arrival of the Value Added Tax (VAT) system in the United Arab Emirates (UAE), it is imperative to become acquainted with its essential features. VAT is a general consumption tax that will be levied on most goods and services transactions, barring specific…
With unanimous approval and the formal signing of the GCC United VAT Agreement by all member nations, the implementation of the VAT taxation system in GCC Member States is on the horizon. The target is for it to become fully operational by 2018, and one…
Starting from January 1, 2018, businesses registered under UAE VAT are obligated to submit their VAT returns online. These returns must be filed on a quarterly basis, with some businesses required to file them monthly. The VAT return form 201 can be filed at a…
Starting on January 1st, 2018, businesses in the UAE must adhere to VAT compliance regulations. One key requirement for compliance is the submission of VAT returns. Most UAE businesses are expected to file these returns on a quarterly basis, while some specific types of businesses…
It is essential to familiarize ourselves with this important fiscal reform.” VAT in the UAE is an extensive consumption tax that will apply to most transactions involving goods and services, unless they are specifically exempted by the law. This tax will be applied at various…
What Constitutes VAT Exempt Supplies in the UAE? Exempt supplies in the context of UAE’s Value Added Tax (VAT) refer to the provision of goods or services for consideration during business operations in the state, where no tax is applicable, and input tax recovery is…
Value Added Tax (VAT) Registration Process in the UAE Introduction to VAT Registration in the UAEVAT registration in the United Arab Emirates signifies official recognition by the government as a Goods and Services provider, granting the authority to collect VAT from customers and remit it…
How to associate your Tax Registration Number (TRN) with Dubai Customs The Federal Tax Authority (FTA) and the UAE Customs Departments have joined forces to streamline the collection of VAT on imported goods. For all businesses registered under VAT, it is imperative to furnish their…
When it comes to corporate tax in the UAE, the implications for Free Zone Persons differ from those for juridical persons or individuals. This article will provide you with comprehensive insights into Free Zone Persons, how they distinguish themselves from other categories of taxpayers, and…