VAT Fines & Penalties
The Cabinet decision states that a fine must be no less than Dh500 and no more than triple the value of the tax on the transaction in question.
In the case of a business failing to keep the required records and other information specified in the tax laws, the business will be fined Dh10,000 the first time and Dh50,000 for a repeat offence.
Businesses were required to have a full accounting of their stock and to begin keeping records as of October 1, 2017, upon the introduction of the UAE’s Excise Tax.
Separately, a failure by the businesses to display prices inclusive of excise tax will incur a Dh15,000 fine.
As for VAT, the new decision states that a failure to comply with conditions and procedures related to keeping the taxable goods in a designated zone or moving them to another designated zone will result in a fine of Dh50,000 fine, or 50 per cent of the tax, whichever is higher, paid on the goods that resulted in the violation.
“These decisions bring an added layer of transparency to the Authority’s relationship with its customers,” said Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance. “This, in turn, provides extra incentive for stakeholders and all concerned parties to abide by tax regulations,” he added.
“All customers can refer to the official Directory of Services Fees to know what is required of them to be in compliance with tax procedures,” Shaikh Hamdan said. “The Directory is based on thorough studies that seek to provide the highest-quality service for the lowest cost, which resonates with the FTA’s mission and vision.”
The Cabinet also decided on the fees for services provided by the Federal Tax Authority (FTA).
This decision outlined what fees would be collected for the services provided by the FTA to its clients.
Tax registration services and the issuance of an electronic tax registration certificate will be free of charge, the decision said. An attested paper registration certificate, however, will carry a Dh500 fee, whilst registration — and renewal — fees for tax agents were set at Dh3,000 for three years.
The registration and renewal fee for an accounting software provider will be Dh10,000 for one year, whereas registering a designated zone will cost Dh2,000 per year. While there are no service fees associated with registering a warehouse keeper or issuing an electronic warehouse keeper registration certificate, an official printed certificate will cost Dh500, the decision said.