FTA Reduced Vat Penalties

UAE Announces reduction in VAT Administrative Penalties by Cabinet Decision no. 49 of 2021 that will be applicable 60 days from April 28, 2021.

Bens Chartered Accountants is pleased to share the great gesture by FTA to combat the impact of Covid19 on businesses. Key highlights of the decision:

Pending Tax Penalty

Taxpayers who currently have pending tax penalties can enjoy a waiver of 70% of pending penalties, provided they settle the principal amount & 30% penalty before 31 December 2021.

Late Registration & De-Registration Penalty

The late registration penalty will be AED10,000 vs AED20,000, whereas the late de-registration penalty will be AED1,000, to be levied each month from the day the de-registration was due, a maximum penalty of AED10,000. Earlier, it was a lump sum of AED10,000.

Non Disclosure of Display Prices Penalties

The revised penalty on failure by the Taxable Person to display prices inclusive of Tax will be AED5,000 vs. old AED15,000.

Penalties of Issuance of Tax Invoice

Failure by the Taxable Person to issue the Tax invoice or an alternative document when making any supply AED2,500 for each case discovered.

Late Payment related Penalties

Late payment penalties will be reduced to four percent per month, a substantial reduction from one percent per day while an overall cap stays at 300 percent.

Voluntary Disclosure Related Penalties

1. A penalty of 5% of unpaid tax if the voluntary disclosure is submitted within less than a year from the date which tax return was due.

2. 10% if the voluntary disclosure is submitted within 1 - 2 years from the date which tax return was due.

3. 20% if the voluntary disclosure is submitted within 2 - 3 years from the date which tax return was due.

4. 30% if the voluntary disclosure is submitted within 3 - 4 years from the date which tax return was due.

5. 40% if the voluntary disclosure is submitted after 4+ years from the date which tax return was due.

How can we help?

Professional experts at Bens Chartered Accountants can be reached for quick help and long-term partnering. Our team will assess the current status and implications of Vat on your business, advise and devise solutions accordingly.