Maintain your tax compliance through Filings.ae platform at an affordable price. Get support from Experienced Accountants for bookkeeping, financial statement preparation, VAT and Corporate Tax filing.
Maintain your tax compliance through Filings.ae platform at an affordable price. Get support from Experienced Accountants for bookkeeping, financial statement preparation, VAT and Corporate Tax filing.
Maintain your tax compliance through Filings.ae platform at an affordable price. Get support from Experienced Accountants for bookkeeping, financial statement preparation, VAT and Corporate Tax filing.
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Manage your business and track services |
Manage your business and track services |
The implementation of Value Added Tax (VAT) in the United Arab Emirates (UAE) on January 1st, 2018, introduced a new set of regulations for businesses operating in the country. Complying with these VAT mandates, which cover registration, filing returns, and other procedures, is crucial to avoid VAT penalties and fines imposed by the Federal Tax Authority (FTA). The UAE Cabinet decision No. (75) of 2023 listed the administrative penalties related to taxation violations of corporations and businesses. In this article, you can learn about the violation and its equivalent administrative VAT penalties and fines in UAE.
Avoid the penalties and fines with timely VAT compliance!!
The following table contains the violations and related administrative penalties based on the UAE Cabinet decision No. (75) of 2023.
No. | Description of Violation | Administrative Penalty Amount in AED |
1 | Failure to keep required records and information specified in the Tax Procedures Law and the Corporate Tax Law |
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2 | Failure to submit tax-related data, records, and documents in Arabic when requested | 5,000 |
3 | Failure to submit a deregistration application within the specified timeframe | 1,000 in case of late submission, and 10,000 maximum |
4 | Failure to inform the Authority of any case requiring amendment of tax record information |
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5 | Failure of the Legal Representative to provide notification of their appointment within specified timeframes | 1,000 |
6 | Failure of the Legal Representative to file a Tax Return within specified timeframes |
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7 | Failure to submit a Tax Return within a specified timeframe |
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8 | Failure to settle payable tax | Monthly penalty of 14% per annum on the unsettled payable tax amount |
9 | Submission of incorrect Tax Return | 500, unless corrected before the submission deadline |
10 | Submission of Voluntary Disclosure for errors in Tax Return, Tax Assessment, or Tax refund application under Clauses (1) and (2) of Article (10) of the Tax Procedures Law | Monthly penalty of 1% on Tax Difference |
11 | Failure to submit Voluntary Disclosure before being notified by the Authority that it will be subject to a Tax Audit under the provisions of Article (20) of the Tax Procedures Law |
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12 | Failure to offer facilitation to the Tax Auditor in violation of the provisions of Article (20) of the Tax Procedures Law | 20,000 |
13 | Failure to submit or late submission of Declaration to the Authority as required under the provisions of the Corporate Tax Law |
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Also read: VAT Return Preparation Checklist in UAE
UAE Businesses can avoid financial penalties due to violations of tax regulations by using the following tips.
Also read: How to Audit VAT returns in UAE?
Businesses in the UAE must comply with VAT regulations to avoid penalties and fines set by the Federal Tax Authority (FTA). These penalties range from failing to register for VAT on time to not cooperating with a tax audit. By following best practices like maintaining proper records, issuing tax invoices, and filing returns on time, UAE businesses can minimize the risk of incurring VAT-related financial fines.
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