Violations and Penalties applicable to UAE Corporate Tax Law

Violations and Penalties applicable to UAE Corporate Tax Law

Businesses in the UAE must be compliant with the existing Corporate Tax laws (Federal Decree Law no. 47), to avoid paying any penalties or fines. It is highly recommended that they register for corporate tax and file the taxes on time and make the correct timely payments.

Here is the list of all the fines: –

Sno.	What is the violation	How much is the penalty?	Who the penalty is due from
1	Failure to keep required records and other information specified under Tax procedures law and Corporate Tax Law.	10,000 for each violation	Due from the Tax registrant
1		20,000 if repeated within 24 months of the last violation	Due from the Tax registrant
2	Failure to submit all tax related data, records and documents in Arabic to the Authority when requested.	5,000	Due from the Tax registrant
3	Failure of a Tax registrant to submit a deregistration application with the specified timeframe	1,000 in case of late submission and on same date every month which can go maximum up to 10,000	Due from the Tax registrant
4	Failure to inform the authority of any instance where an amendment of the information pertaining to the Tax record is required	1,000 for each violation	Due from the Tax registrant
4		5,000 if repeated within 24 months of the last violation	Due from the Tax registrant
5	Failure of the legal representative of the company to provide notification of their appointment within the specified timeframes	1,000	Due from the Legal Representative
6	Failure of the legal representative to file the tax returns within the specified timeframe (applicable from the immediate day after the expiry date of when Tax return is to be submitted, and on same date from the next month thereafter)	500 for each month or part thereof for the first 12 months	Due from the Legal Representative
6		1,000 for each month or part thereof from 13^th month onwards	Due from the Legal Representative
7	Failure of the Tax registrant to file the tax returns within the specified timeframe (applicable from the immediate day after the expiry date of when Tax return is to be submitted, and on same date from the next month thereafter)	500 for each month or part thereof for the first 12 months	Due from the Tax registrant
7		1,000 for each month or part thereof from 13^th month onwards	Due from the Tax registrant
8	Failure to settle the Payable Tax	Monthly penalty of 14% per annum on the unsettled payable tax amount from due date of payment and on same date monthly thereafter	Due from the Tax registrant
8	Failure to settle the Payable Tax	For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows: 20 business days from date of submission, in the case of a Voluntary Disclosure20 business days from date of receipt in case of a Tax Assessment	Due from the Tax registrant
9	Submitting an incorrect tax return	500	Due from tax registrant UNLESS the tax return is corrected before the expiry of the deadline for submission of Tax Return
10	Submission of a Voluntary Disclosure in relation to errors in Tax return, Tax assessment or Tax refund application	Monthly penalty of 1% on tax difference, for each month or part thereof (to be applied as of the date following the due date of the relevant Tax Return, the submission of the Tax refund application, or the Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted)	Due from tax registrant
11	Failure to submit a Voluntary Disclosure in relation to errors in Tax return, Tax assessment or Tax refund application before being notified by the Authority that it will be subject to a Tax Audit	Fixed penalty of 15% on the tax difference	Due from tax registrant
11		Monthly penalty of 1% on Tax difference for each month or part thereof to be applied*	Due from tax registrant
12	Failure to offer facilitation to the Tax auditor if being subject to a Tax Audit	20,000	Due from the tax registrant, legal representative OR Tax agent as applicable
13	Failure to submit or late submission of a Declaration to the Authority	500 for each month or part thereof, for the first 12 months	Due from Tax registrant and this penalty shall be imposed from the day following the expiry date of the timeframe within which the Declaration must be submitted, and on the same date monthly thereafter.
13		1,000 for each month or part thereof from 13^th month

*Where a voluntary disclosure is submitted after being notified that it will be subject to a Tax Audit by the Authority, the penalty shall be imposed for the period from the day following the due date of the relevant Tax Return, or the submission of the Tax refund application or Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted.

Where a Voluntary Disclosure is failed to submit, the penalty shall be imposed as of the date following the due date of the relevant Tax Return, or the submission of the Tax refund application or Notification of the Tax Assessment and until the date of issuance of the Tax Assessment.

How Prema Consulting can help your company avoid fines and penalties?

Our team of Qualified and experienced accountants who are well versed in UAE corporate tax law, will help you register with corporate tax and will assist in all compliance and documentation and will assist during tax assessment or any other representation before the FTA.

We will also assist you in filing your returns timely and accurately while availing all the benefits you are eligible for based on the existing corporate tax law.

We will provide a tax audit from our side internally before we file the tax returns to demonstrate that we are compliant with all the corporate tax laws to date.

We will also help train your staff and provide awareness on the existing corporate tax law and other compliance and documentation requirements.

We will provide long term assistance in Corporate Tax compliance, by advising on any change in Tax law, government policies and any other updates released by the FTA.