VAT Penalty Waiver in The UAE

1. VAT PENALTY VAT PENALTY WAIVER WAIVER IN THE UAE IN THE UAE

2. The UAE’s Value Added Tax (VAT) system, implemented in 2018, established a structured approach to tax compliance. While this system benefits the UAE’s commercial landscape, sometimes result in administrative penalties for businesses. The Federal Tax Authority (FTA) recognises this and offers a VAT Penalty Waiver in UAE as a remedy for organisations with justifiable reasons for non- compliance. This waiver allows businesses in Dubai and other Emirates to reduce or eliminate their penalty burden, enabling them to focus on growth. This guide provides insights into the VAT Penalty Waiver in UAE, including its benefits, eligibility criteria, application procedures, and how professional tax consultants can assist in navigating this process. compliance errors can

3. VAT VAT RECONSIDERATION RECONSIDERATION SERVICES IN UAE SERVICES IN UAE VAT professional assistance to businesses and individuals who wish to challenge VAT penalties imposed by the Federal Tax Authority (FTA). These services are especially beneficial for those who believe the penalty was issued in error or due to factors beyond their control, such as administrative mistakes or unexpected delays. Reconsideration Services in UAE provide

4. WHO CAN APPLY WHO CAN APPLY FOR VAT PENALTY RECONSIDERATION FOR VAT PENALTY RECONSIDERATION VAT penalty reconsideration in Dubai allows businesses and individual taxpayers to contest fines issued by the Federal Tax Authority (FTA) when they believe the penalties were unfairly applied due to legitimate mistakes or circumstances beyond their control. Through VAT reconsideration services in UAE, taxpayers can seek guidance to ensure their application is accurate, complete, and submitted within the FTA’s 20-day deadline from the penalty issuance date. To apply for VAT penalty reconsideration in Dubai, applicants must submit a reconsideration form and a detailed explanation of their case, supported by evidence, on the FTA’s e-portal. This includes documentation that clarifies the cause of the error, such as delayed filings, administrative mistakes, or technical difficulties. Companies often rely on VAT penalties and reconsiderations in Dubai services to improve their chances of success by structuring a persuasive argument and ensuring compliance with FTA requirements.

5. WHAT IS THE WHAT IS THE VAT PENALTY VAT PENALTY WAIVER IN UAE WAIVER IN UAE The VAT Penalty Waiver in UAE is an initiative by the Federal Tax Authority (FTA) allowing businesses to request a reduction or exemption from penalties incurred compliance. Designed to alleviate financial pressure and encourage a proactive compliance, this waiver supports companies striving to maintain economic stability. The UAE reinforces its commitment to promote a supportive and business-friendly environment through this initiative. for VAT non- approach to

6. KEY BENEFITS OF KEY BENEFITS OF VAT PENALTY WAIVER IN UAE VAT PENALTY WAIVER IN UAE The benefits of VAT penalty waivers in UAE are as follows: 01 02 03 Strengthened Business Continuity Opportunity for Correction Financial Relief The VAT penalty waiver reduces or eliminates administrative penalties, freeing businesses from substantial financial liabilities and easing compliance- related expenses. With reduced penalties, companies can focus resources on growth and continuity instead of diverting funds to cover financial liabilities. This waiver allows companies to correct compliance issues without severe penalties, encouraging better adherence to VAT regulations in the future.

7. WHO QUALIFIES WHO QUALIFIES FOR A VAT PENALTY WAIVER IN UAE The FTA provides specific eligibility criteria to qualify for the VAT penalty waiver in the UAE, including: Legitimate Reason for Non-compliance Applicants must provide a valid and genuine reason for non-compliance. Acceptable reasons include inadvertent errors or circumstances beyond control that affected timely compliance. Prompt Rectification Businesses seeking a VAT penalty waiver in Dubai or any other Emirate must address and correct compliance issues as soon as possible to demonstrate their commitment to meeting VAT requirements. Cooperation with the FTA The FTA values applicants’ cooperation during the review process, considering it part of the eligibility criteria.

8. STEPS TO APPLY FOR STEPS TO APPLY FOR VAT PENALTY WAIVERS IN UAE VAT PENALTY WAIVERS IN UAE Step 1: Submission of Application Companies can submit their application to the FTA, which should include a detailed explanation of the reason for non-compliance and necessary supporting documents. Step 2: Meeting Submission Deadlines The FTA requires waiver applications to be submitted within 40 business days of the conclusion of the non-compliance event. Timely filing is crucial to avoid additional penalties. Step 3: Supporting Documentation All applications should include relevant documentation, such as invoices, signed declarations as per FTA standards, and financial records to validate the non-compliance reason. Step 4: Consistent Communication Applicants should maintain open communication with the FTA throughout the waiver review process.

9. ESSENTIAL CRITERIA AND ESSENTIAL CRITERIA AND WAIVER OPTIONS WAIVER OPTIONS 01 02 03 PENALTY REDUCTION OR EXEMPTION ELIGIBILITY PENALTY INSTALLMENT OPTIONS AUTHORISED REPRESENTATIVES According to Cabinet Decision No. 51 of 2021, businesses may request a penalty reduction or exemption if they meet specific criteria, like significant challenges impacting compliance. Businesses can apply for the waiver via an authorised tax advisor, registered tax agent, or legal representative. Only the designated Representative Member is eligible to apply for companies part of a Tax Group. Companies meeting specific conditions, such as having penalties above AED 50,000, can apply for instalment payments, provided there are no ongoing disputes with the FTA.

10. VAT PENALTY VAT PENALTY WAIVER TIMELINE WAIVER TIMELINE The FTA follows a structured timeline for processing VAT penalty waivers: 1.Review of Application: Within 40 working days of submission, the FTA reviews the waiver request. 2.Decision Notification: The FTA issues a decision within 20 working days of the review completion. 3.Taxpayer Notification: Companies are notified of the decision within 10 days of issuance. If no notification is provided, the waiver request is considered denied.

11. ADDITIONAL MECHANISMS ADDITIONAL MECHANISMS FOR VAT PENALTY WAIVERS IN UAE The additional mechanisms for VAT Penalty waivers in the UAE are as follows: 1.VAT Reconsideration Submission: Businesses can request VAT reconsideration for penalty relief if they believe the penalty was applied in error or if they can provide justifiable reasons. 2.Appeal to Tax Dispute Resolution Committee (TDRC): If the FTA denies the VAT penalty reconsideration, companies can appeal to the Tax Dispute Resolution Committee (TDRC) within 20 days of the decision. 3.Application for Reduction or Exemption: As per Cabinet Decision No. 51 of 2021, companies may request penalty reductions or exemptions, provided they meet specific conditions such as unintentional errors or force majeure circumstances.

12. HOW PROFESSIONAL ASSISTANCE HOW PROFESSIONAL ASSISTANCE CAN HELP WITH VAT PENALTY WAIVERS IN DUBAI, UAE CAN HELP WITH VAT PENALTY WAIVERS IN DUBAI, UAE Navigating VAT compliance and penalty waivers can be challenging for companies, especially those unfamiliar with UAE tax regulations. Working with expert tax consultants, like Shuraa Tax Consultants, can streamline the process. With extensive knowledge of the UAE’s tax system, Shuraa’s team can assist companies with the VAT penalty waiver application, help resolve penalties and ensure long-term compliance.

13. CONTACT US Phone +(971) 44081900 Email info@shuraatax.com Website shuraatax.com Location 601 Sheikh Zayed Road, 6th Floor, Aspin Commercial Tower – Dubai