UAE Government announced the Tax Law Violations and Penalties to make it clear for businesses that they need to follow the laws or can be fined from AED 3000 to 50,000. Ensure that you are following these laws and submitting the VAT Returns on due time to save yourself from any kind of penalties. To find more about administrative penalties
| Sr. No. | Description of Violation | Administrative Penalty (AED) |
|---|---|---|
| 1. | The failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law | (10,000) for the first time. (50,000) in case of repetition. |
| 2. | The failure of the person conducting Business to submit the data, records and documents related to Tax in Arabic to the Authority when requested. | (20,000) |
| 3. | The failure of the Taxable Person to submit a registration application within the time frame specified in the Tax Law | (20,000) |
| 4. | The failure of the Registrant to submit a deregistration application within the time frame specified in the Tax Law | (10,000) |
| 5. | The failure of the Registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to his tax record kept by Authority. | (5,000) for the first time. (15,000) in case of repetition |
| 6. | The failure of the person appointed as a Legal Representative for the Taxable Person to inform the Authority of his appointment within the specified timeframe. The penalties will be due from the Legal Representative’s own funds. | (20,000) |
| 7. | The failure of the person appointed as a Legal Representative for the Taxable Person to file a Tax Return within the specified timeframe. The penalties will be due from the Legal Representative’s own funds. | (1,000) for the first time. (2,000) in case of repetition within (24) months |
| 8. | The failure of the Registrant to submit the Tax Return within the time frame specified in the Tax Law. | (1,000) for the first time. (2,000) in case of repetition within (24) months |
| 9. | The failure of the Taxable Person to settle the Payable Tax stated in the submitted Tax Return or Tax Assessment he was notified of, within the time frame specified in the Tax Law. | The Taxable Person shall be obligated to pay a late payment penalty consisting of: - (2%) of the unpaid tax is due immediately once the payment of Payable Tax is late; - (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid. - (1%) daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%). |
| 10. | The submittal of an incorrect Tax Return by the Registrant. | Two penalties are applied: 1. Fixed penalty of: • (3,000) for the first time. • (5,000) in case of repetition 2. Percentage based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows: - (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. - (30%) if the Registrant makes the 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. |
| 11. | The Voluntary Disclosure by the Person/Taxpayer of errors in the Tax Return, Tax Assessment or Refund Application pursuant to Article 10 (1) and (2) of the Tax Procedures Law. | Two penalties are applied: 1. Fixed penalty of: • (3,000) for the first time. • (5,000) in case of repetition 2. Percentage based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows: - (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. - (30%) if the Registrant makes the 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. |
| 12. | The failure of the Taxable Person to voluntarily disclose errors in the Tax Return, Tax Assessment or Refund Application pursuant to Article 10 (1) and (2) of this the Tax Procedures Law before being notified that he will be subject to a Tax Audit. | Two penalties are applied: 1. Fixed penalty of: • (3,000) for the first time. • (5,000) in case of repetition 2. (50%) of the amount unpaid to the Authority due to the error resulting in a tax benefit for the Person/Taxpayer. |
| 13. | The failure of the Person conducting Business to facilitate the work of the Tax Auditor in violation of the provisions of Article (21) of the Tax Procedures Law | (20,000) |
| 14. | The failure of the Registrant to calculate Tax on behalf of another Person when the registered Taxable Person is obligated to do so under the Tax Law. | The Registrant shall be obligated to pay a late payment penalty consisting of: - (2%) of the unpaid tax is due immediately once the payment of Payable Tax is late; - (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid. - (1%) daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%). |
| 15. | A Person not accounting for any tax that may be due on import of goods as required under the Tax Law. | (50%) of unpaid or undeclared tax |
| SR. No. | Description of Violation | Administrative Penalty (AED) |
|---|---|---|
| 1. | Failure by the Taxable Person to display prices inclusive of Tax | (15,000) |
| 2. | Failure to comply with the conditions and procedures related to transfer the Excise Goods from a Designated Zone to another Designated Zone, and the mechanism of processing and storing of such Excise Goods | The penalty shall be the higher of AED (50,000) or (50%) of the tax, if any, chargeable in respect of the goods as the result of the violation. |
| 3. | Failure by the Taxable Person to provide the Authority with price lists for the Excise Goods produced, imported or sold thereby. | (5,000) for the first time. (20,000) in case of repetition |
| Sr. No. | Description of Violation | Administrative Penalty (AED) |
|---|---|---|
| 1. | Failure by the Taxable Person to display prices inclusive of Tax. | (15,000) |
| 2. | Failure by the Taxable Person to notify the Authority of applying Tax based on the margin. | (2,500) |
| 3. | Failure to comply with conditions and procedures related to keeping the Goods in a Designated Zone or moving them to another Designated Zone. | The penalty shall be the higher of AED (50,000) or (50%) of the tax, if any, chargeable in respect of the goods as the result of the violation. |
| 4. | Failure by the Taxable Person to issue the Tax invoice or an alternative document when making any supply. | (5,000) for each tax invoice or alternative document. |
| 5. | Failure by the Taxable Person to issue a Tax Credit Note or an alternative document | (5,000) for each tax credit note or alternative document |
| 6. | Failure by the Taxable Person to comply with the conditions and procedures regarding the issuance of electronic Tax Invoices and electronic Tax Credit Notes | (5,000) for each incorrect document |
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