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Table (1): Violations and Administrative Penalties related to the Implementation of the Federal Law No. (7) of 2017 on Tax Procedures
Description of ViolationAdministrative Penalty (AED)
1The 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.

2The 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)
3The failure of the Taxable Person to submit a registration application within the timeframe specified in the Tax

Law

(20,000)
4The failure of the Registrant to submit a deregistration application within the timeframe specified in the Tax Law(10,000)
5The 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

6The 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)
7The 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.

8The failure of the Registrant to submit the Tax Return within the timeframe 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 timeframe 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%).

10The 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.

11The 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 Person/Taxpayer makes a voluntary disclosure after being notified of the tax audit and the Authority starting the tax audit or after being asked for information relating to the tax audit, whichever takes place first.

–      (30%) if the Person/Taxpayer makes the voluntary disclosure after being notified of the tax audit but before the start of the tax audit.

–     (5%) if the Person/Taxpayer makes voluntary disclosure before being notified of the tax audit by the Authority.

12The 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.

13The 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)
14The 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%).

15A 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.
Table (2): Violations and Administrative Penalties related to the Implementation of the Federal Decree-Law No. (7) of 2017 on Excise Tax
Description of ViolationAdministrative Penalty (AED)
Failure by the Taxable Person to display prices inclusive of Tax.(15,000).
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.
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

Table (3): Violations and Administrative Penalties related to the Implementation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax
Description of ViolationAdministrative Penalty (AED)
Failure by the Taxable Person to display prices inclusive of Tax.(15,000)
Failure by the Taxable Person to notify the Authority of applying Tax based on the

margin.

(2,500)
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.
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.
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.
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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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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