Cabinet Decisions No. 49 of 2021 has been confirmed by FTA on amending some provisions of the Administrative Penalties for the violation of tax laws in UAE. This will enhance the country’s competitiveness in the field of conducting business and is intended to support tax registrants and help them fulfil tax obligations.

“The new amendment will become effective on 28th June, 2021, and will reduce many administrative penalties imposed for violating tax laws.” Khalid Ali Al-Bustani, Director-General of the Federal Tax Authority, said in a press release.

There are 16 types of administrative penalties that have been either reduced or had the method of calculation amended which includes violations on Tax Procedures, Federal Decree Law on Excise Tax, and Federal Decree Law on Value Added Tax.

Al Bustani added that under these amendments, a late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure, and the sooner the taxable person declares and pays due tax according to periods of time specified by the decision, the lower the value of the penalties will be.

According to the press released from the Authority, the FTA shall re-determine the administrative penalties imposed on the tax registrant prior to the effective date of the new amendment which have not been fully paid, to be equal to 30% of the total of such unpaid penalties, stressing that in order to benefit from such a scheme, the tax registrant is required to settle their payable tax in full by no later than December 31st, 2021, and 30% of the total administrative penalties due and unpaid by 27th June 2021, by no later than December 31st, 2021. The FTA shall determine the procedures necessary to implement this.

Tax registrars were advised by Al-Bustani to take advantage of the significant benefits provided by the new amendments as it offers more relief to business sectors in order to support their effective contribution to boosting the national economy growth.

  (Source: Federal Tax Authority)