As part of new measures to support businesses a relief of administrative penalties was imposed.
But three conditions will need to be met before penalties can be reworked to 30 per cent of unpaid dues:
- The first condition is that the administrative penalty must be imposed under Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violating Tax Laws in the UAE before 28 June 2021. This is the date of the new decision taking effect.
- The second condition is that the business involved settles all payable tax by December 31, 2021.
- The third condition requires tax registrants to pay 30 per cent of administrative penalties payable and unsettled by June 28 on or before December 31.
Cabinet Decision No. 49 of 2021 – relates to amending some provisions of Cabinet Decisions No 40 of 2017 on Administrative Penalties for Violation of Tax Laws in the UAE to provide relief as a measure to support business.
Once all these conditions are met, the Federal Tax Authority after December 31 will determine the unsettled payable administrative penalties to be equal to 30 per cent of such unsettled penalties.
This will consequently absolve the tax registrant from paying the remaining 70 per cent and the relief will be applied automatically when the registrant fulfils the specified conditions.
Of the violations and administrative penalties, 16 have been amended either in value or in the calculation method stipulated in the Cabinet Decision.