VAT Penalty Reconsideration in Dubai

VAT Penalty Reconsideration in Dubai | VAT Reconsideration Services | VAT Fines & Penalties in UAE | FTA VAT Fines in UAE. KBA Accounting Services is FTA Certified Vat Consultants in Dubai. The Federal Tax Authority is the regulatory body in the UAE that takes charge of the VAT laws of the country, managing and collecting federal taxes and fines/penalties. It is imperative for business organizations and entrepreneurs to be aware of the country’s tax laws in-order to undertake responsible fiscal planning. In situations where the taxpayers are not satisfied with the decision of the authority, they can apply for VAT Penalty Reconsideration in Dubai, as per article (27) of the Federal Law No. (7) of 2017.

When can you apply for VAT Penalty Reconsideration?

For Vat Penalty Reconsideration in Dubai can be applied within 20 working days from the day of receipt of the penalty (Eg: a VAT late payment penalty) Any organization that believes that they have been wrongly penalized can file this vat reconsideration. It must be done online and in Arabic.

How does the FTA respond to applications for vat penalty reconsideration?

The FTA will review the facts of the case and arrive at a decision within 20 working days of receipt of the application. Within 5 days of making the decision, the FTA will inform the same to the applicant. The FTA has complete authority to reverse the fine or not depending on the case.

Types of VAT penalties in the UAE

VAT administrative penalty: These penalties are imposed by the FTA when organizations exhibit non-compliance or breach of the provisions of Federal Law No. (7) of 2017.

Tax evasion penalty: These penalties are imposed on organizations that try to evade tax or lower their dues through illegal means.

What can one do if they are not satisfied with the FTA’s decision?

If one is not pleased with the decision of the FTA and believes that they have grounds for reconsideration, they may approach the Tax Dispute Resolution Committee. Such an objection must be raised within receiving the notification of rejection from the FTA. You cannot raise an objection to the FTA’s decision under these two circumstances:

If the reconsideration has not already been filed with the FTA
The penalties levied have not yet been settled

The Tax Dispute Resolution Committee will review the case and arrive at a decision within 20 working days, they might even extend the case for an additional 20 working days if new facts have been discovered.

If the penalty amount is less than AED. 100,000, the decision of this committee is final. If the penalty is more than AED. 100,100, and one is not satisfied with the final decision, they may approach the federal court within 20 working days from the date of notification.

The UAE has established this mechanism to ensure that businesses are able to function in a fair and dynamic environment while contributing to the economy. It is due to such transparent systems and a strong economy that the UAE continued to keep its lead in the Middle East and Arab region, in the World Bank’s Ease of doing business ranking 2020, with the 16th position in the global ranking of 190 countries.