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Get Up To 70% Off On Your Tax Violation: Deadline June 28, 2021

The UAE’s Federal Tax Authority (FTA) declared that any person or group in the country has the right to apply to reduce or seek exemption from the penalty imposed for violating the country’s tax laws.

UAE VAT Fines and Penalty Relief


UAE Government on April 28, 2021 issued Cabinet Decision No. 49 of 2021 significantly reducing the quantum of penalties across various categories of violations. The three key changes were:

  • 1. Reduction in late payment penalty from 1 per cent per day to 4 per cent per month.
  • 2. No late payment penalty on voluntary disclosure if tax is paid within 20 days of its submission.
  • 3. Introduction of amnesty scheme enabling a reduction in unpaid past penalties by 70 per cent.

The Effective date for implementation of this new changes is expected to be 28th Jun 2021.The Decision reduces many administrative penalties imposed on the violation of tax laws post 28 June 2021. The Decision allows registrants who have been penalized prior to the effective date of the Decision to benefit from a penalty redetermination scheme, where they would only be required to settle 30% of their payable administrative penalties outstanding on 28 June 2021 subject to meeting the requirements specified in the Decision.

Amnesty


The UAE Government has also introduced an amnesty scheme through this, where unpaid penalties that were levied under the previous Cabinet Decision No. 40/2017 can be reduced by 70 per cent provided the taxpayer discharges the unpaid tax and 30 per cent of total penalties by December 31, 2021. While further details are awaited about the scheme and its application, it also needs to be seen whether it could apply to cases pending under litigation.
The reduction in penalties is a step in the right direction as it should result in significantly higher compliance among businesses, consequently leading to increased tax collections for the Government.

VATBOX : FTA Certified Tax Agents in UAE


The reduction in fines is a positive move since it should lead to better compliance among firms and, as a result, improved tax revenue for the government.
VATBOX is one of the leading Tax agents by FTA. By assuring compliance, VATBOX will assist you in avoiding all types of VAT and excise tax fines. Our tax professionals will do a tax health check to identify any anomalies and correct them as soon as possible. Contact us if you or your company is facing FTA fines and penalties. We will work with you to reduce the penalty and obtain the best possible outcome.