VAT Fines and Penalties in UAE

Complete list of VAT Fines and Penalties in UAE

VAT Fines & Penalties in UAE

Federal Tax Authority (FTA) has approved the complete and final list of all the administrative VAT Fines and Penalties in UAE that will be imposed on businesses for violations of the VAT laws.

Every VAT fine or penalty will be no less than AED 500.

The complete and approved list of the administrative VAT fines and penalties in UAE for breaching the law related to VAT and excise tax are as follows:

Violations related to tax procedures

1. Failure to keep the required records specified by the tax procedures law and the tax law.

AED 10,000 for the first time.

AED 50,000 for each repeat violation.

2. Failure to submit the required records in Arabic when requested by the Authority.

AED 20,000

3. Failure to submit a registration application within the timeframe specified by the tax law.

AED 20,000

4. Failure to submit a deregistration application within the timeframe specified by the tax law.

AED 10,000

5. Failure to inform the Authority of an amendment to tax records that needs to be submitted.

AED 5,000 for the first time.

AED 15,000 in case of repetition.

6. Failure to notify the authority that a legal representative has been appointed for the business within the specified timeframe. The penalties will be charged to the legal representative.

AED 20,000

7. Failure of the legal representative to file a tax return within the specified timeframe. The penalties will be charged to the legal representative.

AED 1,000 for the first time.


AED2,000 in case of repetition within 24 months.

8. Failure of the Registrant to submit a tax return within the time frame specified by the tax law.

AED 1,000 for the first time.

AED 2,000 in case of repetition within 24 months.

9. Failure to pay the tax stated in the tax return/tax assessment form within the time frame specified by the tax law. The taxable person will incur a late payment penalty as follows:

  • 2% of the unpaid tax is due immediately.
  • 4% is due on the seventh day following the deadline for payment.
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.

10. Submission of incorrect tax returns.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time.
  2. (AED 5,000) in case of repetition
  • Percentage-based penalty shall be applied on the amount unpaid to the Authority due to the error as follows:
  1. (50%) if the Registrant does not make a voluntary disclosure or he made the voluntary disclosure after being notified of the tax audit and the Authority has started the tax audit process, or after being asked for information relating to the tax audit, whichever takes place first.
  2. (30%) if the Registrant makes a voluntary disclosure after being notified of the tax audit and before the Authority starts the tax audit.
  3. (5%) if the Registrant makes a voluntary disclosure before being notified of the tax audit by the Authority.

11. Voluntary disclosure by a business of errors in a tax return, tax assessment, or refund application.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time.
  2. (AED 5,000) in case of repetition
  • Percentage-based penalty shall be applied on the amount unpaid to the Authority due to the error as follows:
  1. (50%) if the Person/Taxpayer makes the disclosure after either of the following conditions applies: a) they have been notified of the tax audit and the Authority has started the audit process, or b) they have been asked for information relating to the tax audit.”
  2. (30%) if the Person/Taxpayer makes a voluntary disclosure after being notified of the tax audit but before the start of the tax audit.
  3. (5%) if the Person/Taxpayer makes a voluntary disclosure before being notified of the tax audit by the Authority.

12. Failure of a business to voluntarily disclose errors in a tax return, tax assessment, or refund application before a tax audit.

Two penalties are applied:

  • Fixed penalty of:
  1. (AED 3,000) for the first time
  2. (AED 5,000) in case of repetition
  • 50% of the amount unpaid to the Authority due to the error.

13. Failure of a person or business to facilitate the work of the tax auditor.

AED 20,000

14. Failure of the Registrant to calculate tax on behalf of another person as required under the tax law.

The Registrant shall incur a late payment penalty as follows:

  • 2% of the unpaid tax is due immediately once the payment is late.
  • 4% of the amount of tax which is still unpaid is due on the seventh day following the deadline for payment.
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.

15. Failure to account for tax due on import of goods as required under the tax law.
50% of unpaid or undeclared tax.

Penalties and Fines Related to VAT

Failure by the taxable person/business to display prices inclusive of tax.

AED 15,000

Failure by the taxable person/business to notify the Authority of applying tax based on the margin.

AED 2,500

Failure to comply with conditions and procedures related to the transfer of goods in designated zones.

The penalty will be the higher of AED 50,000 or 50% of the tax, if any, unpaid on the goods as the result of the violation.

Failure by the taxable person/business to issue a tax invoice or alternative document when making any supply.

AED 5,000 for each missing tax invoice or alternative document.

Failure by the taxable person/business to issue a tax credit note or alternative document.
AED 5,000 for each missing tax credit note or alternative document.

Failure by the taxable person to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes.

AED 5,000 for each incorrect document.

VAT Voluntary Disclosure Form by FTA – Form 211

A voluntary disclosure is a form provided by Federal Tax Authority (FTA) to allow businesses and taxpayers to notify FTA about the errors/mistakes and omission/changes in a Tax return or Tax Refund. Voluntary disclosure form 211 in UAE helps a taxable person to make correction in the errors they have committed while submitting a VAT Return or applying for the VAT Refund. It gives a choice to the taxable person or business to voluntarily disclose the mistakes they have done in the previous VAT Return or VAT Refund.

SAB Auditing of Accounts is a certified Tax Agent in UAE. Our Tax Experts have handled and controlled a lot of situations and provided the best suitable solutions to the companies to corroborate that businesses will constantly operate in a smooth and best possible way. To be a certified tax agency in the country, which means that the firm met the high standards of the government to become a tax agent in UAE.

SAB will help your business to grow by avoiding any VAT fines and penalties through providing the following services:

Tax Agent in UAE - Tax Agent Dubai - FTA Tax agent

71 thoughts on “VAT Fines and Penalties in UAE

  • Dear,

    We had an FZC in Ras Al Khaimah and we have registered as VAT also. We closed our business and apply for de-register and due to some delay or errors we got penality about 10,000 and there is 3,000 penalty also. There is any solution now to wave this penalty?

  • Dear Sir,

    We have Received Late payment Penalty Nearly 300k , Is there any solution to reduce the amount.
    056-7863559

    • We are sorry to hear you that you have received a fine from FTA. We have directed one of our Tax Expert to get back to you immediately. Thank you!

  • Hi , we have received a fine of AED 20,000 for late VAT registration . Can we do something to waive this fine?
    0557527422

  • Hi

    I have recieved 17,000 fine for late deregistration and non filing of tax on the website. Can you please help.

    M- 0566217665

  • We have tax panelty of arround 150000
    Is there any way we can have some relaxation ?
    Rajesh
    050 3308564

  • hello sir, i miss my two bills in vat return and i file vat return is there any penalty came or not? and what is the solution for this?“

  • i got double penalty of AED 4000/- instead of AED 2000/- they gave me AED 2000/- fine 2 times on same time same day on 29th of May, 2020 i have no idea why this happens to me i just forget filling VAT return now can some one suggest me what i should do to remove this fine at least thy should reduce the extra penalty

    • Hi Jashank,

      Thank you for your inquiry, please share your contact details and one of our representatives will get in touch with you.

  • Hi
    I have filled vat returns and submitted vat refund request but fta asking zero rated official invoice with customs stamped declaration.
    Can you explain about about zero rated invoice and stamped customs declarations.

    • Hi Giridher, We have forwarded your inquiry to our tax department. Kindly share your contact details with us. Thank you!

  • We have late filing penalty almost Dhs. 18,000 AED
    Is there anything we can do to remove or less the fine. 0559833788

  • I have two questions:
    1-What is penalty for not collecting VAT by a registered Person.
    2-what are the rules for collecting Fees and VAT on others behalf. Like in case of banking services, one bank collects Cheque special clearing fees AED205 from its customer plus 5% VAT. Out of which AED100 will be its income and AED5 will go to Central Bank while AED100 will go to paying bank. Now does the collecting bank pay the entire VAT AED10.25 to FTA or only pay AED5 to FTA and remaining AED5.25 forward to CB and other bank.

  • Hi, We have already filled for deregistration but they are asking additional information, Can you assist us in this process?

  • Hi, we have received a fine of AED 20,000 for late VAT registration. Can we do something to waive this fine- 054-3086497

  • Dear Sir,

    We have Received Late payment Penalty Nearly 70000 , Is there any solution to reduce the amount.
    0509203888

  • Dear Sir,

    We have Total Outstanding Liability 54,495.36 AED since October 2019 we didn’t pay our tax is there any way we can pay it in differed payment or flexible payment? We are struggling since the start of the pandemic.
    Thank you in advance for your response.

  • I’m new to business. Please let me know if we need to file vat returns for the paid tax invoices or submitted tax invoices as payment terms are 90 days and above.

  • Hi, we have received a fine of AED 20,000 for late VAT registration. Can we do something to waive this fine- 055 8235485

    • Hi Mr. Sajie.

      We are sorry to hear that you got a penalty from FTA. Definitely we will assist you. One of our VAT representatives will contact you shortly.

      Thank you

  • We Summited invoices to our clients and we paid VAT as per invoices But till now we did not receive the Payment from the client last 9 Months .

    What we should do?

  • Hello,
    I applied for VAT registration and 3 weeks past still my application status is pending. Is that normal?

  • Hello,
    I have added new member in our group, but its rejected and advised to register separately the new member.
    Then I have registered separately then I have marked yes option for Are you also applying to create or join a Tax group? from then onward FTA was asking some additional documents and so on this process went for around 8 to 9 months. Then I called FTA and asked why its not getting approved. Then they advised me to register again but select no for re you also applying to create or join a Tax group? Its approved now but I have AED 20,000 late registration penalty, plus late filling for 4 quarters AED 7,000, Plus late payment fees also.

    Is there any way to file reconsideration against these paneities and what are the chances.

    • Please share your contact details with us and one of our representatives will contact you. Or call # 050 454 8424 / 04 259 4747
      Thanks

  • We have a Vat Return Filing Penalty of 2000 AED. We did not have any financial txn in the last quarter and hence missed filing Nil return. Can anything be done to get a penalty waiver ?

  • Hello
    I closed my company to the UAE and did the FTA de-registration procedure. The status was pre-approved on 3/1/2021. Having the habit of declaring the VAT every 3 months I did not know that it had to be done for the month of March and I just received a fine of 2000 aed. Can I cancel it?
    Thank you

    • Please share your contact details with us and one of our representatives will contact you. Or call # 050 454 8424 / 04 259 4747
      Thanks

    • Please share your contact details with us and one of our representatives will contact you. Or call # 050 454 8424 / 04 259 4747
      Thanks

  • I have receive penalty 60000 in fta. Iwant to relief this amount can you do something please contact me 0506908187

    • Sorry to hear that you received a fine from FTA. We will surely help you in waiving off the fine. One of our tax expert will contact you shortly.

      Thank you!

  • Hi, we have got late payment penalty of AED 100k. Is there any possibility for waiving off?? Kindly contact me.
    Sabir Ali
    054-7478639

    • Sorry to hear that you received a fine from FTA. We will surely help you in waiving off the fine. One of our tax expert will contact you shortly.

      Thank you!

  • We have a Vat Return Filing Penalty of 4500 AED. We did not have any financial txn in the last year and hence missed filing Nil return. Actually i buy a license from the person who close the company. But that penalty its showing still.

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