3 Ways to Avoid VAT Fines and Penalties in the UAE
Is your business suffering because of hefty fines and penalties piling on top of each other?
As per the UAE cabinet, a list of administrative penalties will be imposed on businesses for violating tax laws. Each fine or penalty starts from AED 500 up to triple of the tax value, depending on the transaction in question.
Knowing the rules in the UAE as they come out will help you avoid unnecessary expenses.
Here are 3 ways how –
1) Know the penalties regarding tax procedures
– Failure to keep the required records specified by the tax procedures law and the tax law
Penalty: AED 10,000 (first offence); AED 50,000 for each repeat violation
– Failure to submit the required records in Arabic when requested by the Authority
Penalty: AED 20,000
– Failure to submit a registration or deregistration application within the timeframe specified by the tax law
Penalty: AED 20,000 & AED 10,000 respectively
– Failure to inform the Authority of an amendment to tax records that needs to be submitted
Penalty: AED 5,000 (first offence); AED 15,000 (repeat offence)
– Submission of incorrect tax returns
Penalty: fixed penalty & percentage-based penalty
The following fixed penalties will be applied for the submission of incorrect tax returns –
AED 3,000 (first offence)
AED 5,000 (repeat offence)
Should there be any errors, a percentage-based penalty will be applied on the unpaid amount to the authority –
50% if the registrant didn’t make a voluntary disclosure or if the voluntary disclosure was made after being notified of the tax audit
30% if the registrant makes a voluntary disclosure after being notified of the tax audit and before the authority starts the tax audit
5% if the registrant makes a voluntary disclosure before being notified of the tax audit by the authority
To know more tax procedure laws and penalties, speak to one of our experts at Able Consulting – call us on +971 2 495 7075 or fill up this form
2) Know the violations related to VAT (all these penalties are applicable to the taxable person or business)
– Failure to display prices inclusive of tax
Penalty: AED 15,000
– Failure to notify the authorities of applying tax based on the margin
Penalty: AED 2,500
– Failure to comply with the conditions and procedures related to the transfer of goods in designated zones
Penalty: More than AED 50,000 or 50% of the tax
– Failure to issue a tax invoice or alternative document during the supply process
Penalty: AED 5,000 for each missing tax invoice or alternative document
– Failure to issue a tax credit note or alternative document
Penalty: AED 5,000 for each missing tax credit note or alternative document
– Failure to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes
Penalty: AED 5,000 for each incorrect document
3) Know the violations regarding excise tax (all these penalties are applicable to the taxable person or business)
– Failure to display prices inclusive of tax
Penalty: AED 15,000
– Failure to comply with the conditions and procedures related to the transfer of excise goods in designated zones
Penalty: More than AED 50,000 or 50% of the tax
– Failure to provide the authority with price lists for the excise goods they produce, import or sell
Penalty: AED 50,000 (first offence); AED 20,000 (repeat offense)
Don’t let your business suffer due to avoidable penalties and fines. Contact our team at Able Consulting to help you stay in sync with tax regulations here in the UAE – call us on
+971 2 495 7075 or email info@ablelaws.com
