FTA or common known as the Federal Tax Authority has already approved the final & complete list of all administrative Fines as well as Penalties in the UAE which will get imposed on the businesses for the violations of the respective VAT laws.As a matter of fact, each of the VAT penalties as well as fines will be nothing lesser than around AED 500. The approved list has been completed including the administrative VAT penalties alongside fines in the UAE to breach VAT laws & excise the tax as mentions below:

Violations Concerning the Tax Process

  1. The ones who fail to keepthe required records in a specified manner by respective tax process in tax laws will have to pay AED 10,000 but only for their first times.
  2. The ones who fail to submit some necessary records in the Arabic record upon requests made by Authority will have to pay a total of AED 20,000.
  3. The ones who fail at submitting the registration application right within time frames as mentioned by law of tax will have to pay around AED 20,000.
  4. The ones who fail at submitting the deregistration applications within some given time frame as specified by law will require paying about AED 10,000.
  5. The ones who fail at informing Authority of the amendment to records which require getting submitted will be paying about AED 5,000. But this is for ones who are first-timers. In case it’s repeated, they will require paying about AED 15,000.
  6. The ones who fail to notify authority which legal representative appoints for business purpose with the time frame will have to pay penalty as charged by the representative. They also will have to pay about AED 20,000.
  7. The ones who fail at filing the tax return with the subjected time will pay the charged penalty as per legal representatives. For the first timers, they will require paying about AED 1,000 only for the very first time. And in case it gets repeated, they will have to pay about AED2,000 within a timeframe of 24 months.
  8. The ones who fail to submit the tax return in the given time will have to pay penalty as of AED 1,000 for their very first time. And in case it gets repeated, they will have to pay about AED 2,000 within a time frame of 24 months.
  9. The ones who fail at paying tax as mentioned in tax assessment or tax return in a specified time by law will incur the late penalties. As a result, 2% of unpaid tax will get due. A total of 4% will be due on 7thday after deadline.1% of daily penalty is then charged and it will be charged to max of about 300%.
  10. When there’s any submission of any incorrect returns (tax), there will be a total of two penalties. The first one is the fixed penalty that includes about AED 3,000 and AED 5,000 for the ones first time and repetition respectively. There will also be some penalties based on the percentage applied on amount that is unpaid to law due to some reasons.
  11. Two penalties are supposed to be applied when there’s a voluntary disclosure by errors of business in the return of tax, refund application, as well as tax assessment.The penalty for the first-timers is about AED 3,000. However, if it repeats, there will be total SED 5,000 penalty.
  12. When the business failsto disclose the errors in the tax, refund application tax payment, two penalties will be applied. The fixed ones are AED 3,000 for first-timers and AED 5,000 for the repeat cases. There will also be 50% of unpaid amount to Authority because of the error.

These are some of the penalties for VAT in the UAE. For more clarity regarding VAT, you can reach out to GCC Filings. The company helps with VAT registration in UAE, return filling, auditing, accounting and more.

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