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VAT Fines and Penalties
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VAT FINES AND PENALTIES

FTA (Federal Tax Authority) implemented VAT fines and penalties in UAE. Every registered business in UAE is restrained to submit VAT dues to avoid any kind of tough situation of VAT fines and penalties. If one violates the rules and regulations than FTA has strict rules of imposing VAT Fines and Penalties to those business violent.
FTA has very strict law in UAE if companies tried to run away from VAT. To get rid of any hurdle and heavy fines, every business holder must submit his VAT in time according to FTA rules. However, in current circumstances of COVID-19, FTA make some amendments in their law to any loss recovery due to pandemic. These amendments is implemented from 28th June, 2021.
However, TAX CONSULTANCY is the only approved tax consultancy is DUBAI, which consists of a team of professionals and high qualified auditors to provide you complete guidance on VAT implementation and also help you out to keep you away from VAT fines. But in case, if your business company receive a VAT fine from FTA, Then TAX CONSULTANCY will be very helpful for you to waive off your VAT fines.
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VAT penalty for Non-Registration

If any company misses the VAT Registration Number cutoff or any kind of failure to fulfill the VAT registration process under the given time frame limit which is mentioned by FTA (Federal Tax Authority) then the company must face a fine of almost 20,000 AED. This fine is called a Penalty and in real manners, this kind of penalty can cause of huge loss for the business.

Group Registration for VAT:

In this process of VAT group registration, when two or more establishments or parties joint together in a group form and depicts that they are a group of companies then they will have to pay single tax. Also, in this process of registration of VAT Group Scheme there is one VAT registration number is assigned and can file only one return. A VAT group allows people and entities that are closely joined financially, economically and organizationally to work as a single VAT person.

Prerequisites for a VAT group:

There are some prerequisites which must needed to fulfill by the linked parties while making a VAT group are mentioned below:
1.     Every party must have a place of company or an owned establishment in UAE (place of establishment, implies a location where a business is legally established in the UAE or where significant management decisions are taken and the main management functions are conducted: however, the fixed establishment implies a location where a person conducts one’s business regularly or permanently, including branches)

2.     The interested companies should be related at the economic, financial or regulatory level.

3.     One or more than one person is conducting business in the VAT group which shall control the others.
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Looking for VAT Discounts or VAT waive off in Dubai?

FTA also provides some advantages to their tax payers to minimize their VAT fines and Penalties. FTA has some rules regarding VAT penalty waiver but only Tax experts can handle and deal with them expertly. Many business and companies have pending due amounts of VAT and Excise tax but FTA also has some soft gestures regarding these defaulters.
If you face a heavy fine and penalty from FTA, TAX CONSULTANCY experts are 24/7 there to deal with these kinds of fines and helping out in completely waive off those fines and penalties. We’re registered Tax consultants who can smoothly handle the concerns according to the rules and regulations of FTA.

VAT PENALTIES SATTELMENTS

VAT Penalties occur when a company flops to pay the tax defined in the tax return/tax assessment form within the timeframe 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%.
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But now this is good to know that from Government is willing to offer 70% discounts on unsettled penalties under some of conditions mentioned below.

1.)     All organizational penalties should be imposed on or before 28/06/2021. 

(It means penalties executed after 28/06/2021 cannot get benefits of this waiver.)

        2.)   The taxpayer had not settled all the administrative penalties imposed on it, in full before 28/06/2021.

(It means if the taxpayer had paid his penalties in full before 28/06/2021 then he cannot get benefit.)

  The taxpayer has undertaken all the following:

i.                     Settled all payable tax

ii.                   Settled 30% of the total unsettled administrative penalties

iii.                 NO any Unsettled penalty or outstanding TAX left by the FTA till 31 December 2021

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it means the registrant shall ensure that by 31 December 2021, no payable tax is still outstanding whether such tax was payable before or after 28 June 2021, and that all such amounts have been received by the FTA by 31 December 2021 and 30% of the total unsettled administrative penalties referenced above which were imposed before 28 June 2021, no later than 31 December 2021.

If the taxpayer fulfills the all above-mentioned situations, he will be allowed to avail this waiver of 70% at the end of the year 2021.

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