Administrative Penalties Under VAT In UAE

The Dubai, UAE, cabinet has approved the entire list of all the administrative VAT Fines and vat Penalties in UAE that may be imposed on businesses for violations of the VAT laws. Administrative penalties are additional amounts imposed on a taxable person for breaching the provisions of the VAT Law. The following are some of the steps which invite administrative penalties under VAT in UAE.

Actions on Administrative penalties under VAT in UAE

All actions inviting penalties under VAT	Administrative penalty (subjected to change)
When a taxable person, fails to display prices inclusive of VAT	15,000 AED
Failure to notify FTA regarding the charge of tax based on margin	2,500 AED
Failure to comply with maintenance of the record of goods within designated zones or moving them to other designated zones	Higher of 50,000 AED or 50% of chargeable tax
Failure while issuing a tax invoice or an alternative document while making supply	5000 AED for each tax invoice or alternative document
Failure by a taxable person for issuing a tax credit note or an alternative document	5,000 AED for every tax credit note or alternative document
Penalty for non-registration of VAT	20,000 AED

Penalty for failing to display the prices inclusive of VAT

Every person eligible for tax should display the price of goods or services taxable, except in the following cases:

1.       The supply is for exports

2.       The customer is a registrant

3.        Import of goods or services.

•  Failure by the taxable individual to notify the FTA charge of Tax (based on margin)

A taxable person should calculate tax on the profit margin on the supply of second-hand goods, antique stamps, coins, etc. The profit margin is the difference between the purchase price and the selling price of the goods.

• Failure to comply with the conditions and procedures related to moving and keeping goods in a designated zone.

A Designated zone is taken into account outside the state of UAE for the aim of VAT. As a result, any transfer of products between selected zones leads to zero VAT levied.

• Failure to register for VAT in UAE

If a VAT eligible business in the UAE fails to register within the required timeline, it ought to pay the penalty.

A penalty of Dh20, 000 shall apply to those registrants who fail to submit a registration application within the specified timeframe.

Taxable person’s right to object penalties

Any taxable person has the right to object when any of the penalties mentioned above are imposed by authorities. A request can be submitted to reconsider the imposition of penalty. A taxable person has to give a valid reason for reconsideration.

Any registrant failing to settle any penalties within the specified timeframe can seek the guidance of a VAT expert for further remedy.