New VAT fines and penalties in UAE will motivate the businesses to avoid more fines by ensuring VAT compliance. FTA amends VAT fines and penalties to in UAE help businesses to recover from the impact of COVID-19. BMS Auditing will assist you to get VAT fines Reduction and discounts by ensuring tax compliance. Cabinet Decision No. 49 of 2021 amended some of the administrative penalties applicable to certain violations and allows for a redetermination of some of the penalties already imposed.
Businesses in UAE must follow the rules and regulations of VAT as per Federal Tax Authority (FTA). Non compliance in VAT will attract fines and penalties. BMS is assisting number of companies in UAE by implementing VAT properly and smoothly. BMS Auditing is one of the best audit and accounting firm in UAE. We are approved tax agents by FTA in UAE.
Amendment in VAT fines and penalties
Federal Tax Authority (FTA) has reduced old VAT fines and penalties in UAE. The objective of VAT fines reduction and discount is to cover up the impact of COVID-19.
Through this way, companies will get a chance to look back at all their VAT errors and fix them to avoid VAT penalties. Following are the comparisons between old and new VAT fines and penalties by FTA.
1. Late VAT Registration fine
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- Old – AED 20,000
- New – AED 10,000
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2. Failure of the business maintaining proper books of accounts (Accounting and Bookkeeping)
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- Old – AED 10,000 for the first time and AED 50,000 in case of repetition.
- New – AED 10,000 for the first time and AED 20,000 in case of repetition.
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3. Late VAT De-registration fine
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- Old – AED 10,000
- New – AED 1,000 in case of delay, and on the same date monthly thereafter, up to a maximum of 10,000.
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4. Failure in submitting the data, records and documents related to Tax in Arabic to the Authority when requested
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- Old – AED 20,000
- New – AED 20,000 (Not amended)
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5. Failure to inform the Authority of any circumstance that requires the amendment of the information pertaining to its Tax record kept by Authority
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- Old – AED 5,000 for the first time and AED 15,000 in case of repetition.
- New – AED 5,000 for the first time and AED 10,000 in case of repetition.
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6. Failure of the Legal Representative of the Taxable Person to inform the Authority of its appointment as Legal Representative within the specified timeframe, in which case the Penalties will be due from the Legal Representative’s own funds
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- Old – AED 20,000
- New – AED 10,000
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7. Failure of the Legal Representative for the Taxable Person to file a Tax Return within the specified timeframe
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- Old – AED 1,000 for the first time and AED 2,000 in case of repetition within 24 months.
- New – AED 1,000 for the first time and AED 2,000 in case of repetition within 24 months. (Not amended)
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8. Failure of the Registrant to submit the Tax Return within the timeframe specified in the Tax Law
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- Old – AED 1,000 for the first time and AED 2,000 in case of repetition within 24 months.
- New – AED 1,000 for the first time and AED 2,000 in case of repetition within 24 months. (Not amended)
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9. Late VAT payment penalty
Old –
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- 2% of the unpaid tax is due immediately.
- 4% is due on the seventh day following the deadline for payment.
- 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.
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New –
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- 2% of the unpaid tax is due immediately.
- 4% monthly penalty is due after one month from the due date of payment, and on the same date monthly thereafter, on the unsettled Tax amount to date.
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10. Submission of Incorrect tax return by the registrant
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- Old – AED 3,000 for the first time and AED 5,000 in case of repetition.
- New – AED 1,000 for the first time and AED 2,000 in case of repetition.
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11. Submission of a VAT Voluntary Disclosure by the Person/Taxpayer on errors in the Tax Return, Tax Assessment or refund application
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- Old – AED 3,000 for the first time and AED 5,000 in case of repetition.
- New – AED 1,000 for the first time and AED 2,000 in case of repetition.
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12. Failure of the Person conducting Business to facilitate the work of the Tax Auditor
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- Old – AED 20,000
- New – AED 20,000 (Not amended)
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13. Person not accounting for any Tax that may be due on the import of goods as per the Tax Law
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- Old – 50% of unpaid or undeclared Tax
- New – 50% of unpaid or undeclared Tax (Not amended)
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VAT Fines and Penalty Waiver
BMS will help you in all the ways to avoid all types of VAT fines. Moreover, if your business have any kind of fines from FTA, BMS Auditing's VAT Consultants in Dubai will help you by requesting VAT Penalty waiver in UAE to subside or eliminate the VAT fines.
Our tax experts will conduct a Tax health check in order to find out any discrepancies and rectify them at the earliest. If you or your business are facing any kind of fines and penalties from FTA, Contact us – We will help you in reducing the penalty and get the maximum relief.
How BMS can help?
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- Being a certified tax agent in UAE, BMS Auditing will conduct a VAT health check in order to identify any errors or non-compliances and fix them to avoid VAT fines.
- BMS will waive off all kinds of VAT fines and penalties by applying VAT reconsideration
- If you have any pending VAT fines, BMS will assist you to get the reductions and discounts on VAT fines.
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Our Tax Experts have handled and controlled a lot of situations and provided the best suitable solutions to the companies to corroborate that businesses will constantly operate in a smooth and best possible way. To be a certified tax agency in the country, which means that the firm met the high standards of the government to become a tax agent in UAE. Moreover, we are also providing best VAT services in UAE such as VAT accounting, VAT return filing, VAT refund services, VAT Deregistration and VAT audit services.
