KHALEEJ TIMES, Wednesday, Sep 15, 2021 | Safar 8, 1443
UAE tax authority offers 30% reduction on unpaid penalties
Emirates:
Tax law violators in the UAE can benefit from a 30 per cent reduction on
unpaid penalties as per a recent Cabinet decision, the Federal Tax Authority
(FTA) said on Tuesday.
The FTA said the liberal move would boost the UAE’s global business
competitiveness by establishing a tax legislation environment that encourages
self-compliance and offers significant support to the national economy.
The Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision
No. 40 of 2017 outlines 16 types of administrative penalties that have either
been reduced or had the method of calculation amended. The amendments include
administrative violations related to the application of Federal Law No. 7 of
2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and
Federal Decree-Law No. 8 of 2017 on Value Added Tax.
As part of its ongoing awareness-raising efforts, the FTA launched an awareness
campaign last May. The FTA’s representatives communicated with the business
sector to introduce the mechanism for implementing the new decision, the
facilities it offers registrants, how to benefit from these facilities, and the
conditions required to benefit from the redetermination of administrative
penalties imposed on registrants to equal 30 per cent of the total unpaid
penalties.
In a press statement, the FTA outlined a set of conditions that need to be met
in order to benefit from the redetermination of penalties.
“First, the administrative penalty must have been imposed under Cabinet Decision
No. 40 of 2017 before June 28, 2021, and that the administrative penalty due
were not settled in full until June 27, 2021. Furthermore, the registrant should
settle all due payable tax by December 31, 2021, and settle 30 per cent of the
total unsettled administrative penalties imposed before June 28, 2021, no later
than December 31, 2021.”
The FTA said that, should the registrant meet all these conditions, the
administrative penalties will be redetermined to equal 30 per cent of the total
unpaid penalties that will appear on the FTA’s electronic system after December
31, 2021.
The federal body urged registrants to use the “Payment Adjustment Type” feature
when settling their due payments on the FTA’s e-Services portal. The feature
allows taxpayers to allocate the amounts based on their payment preferences.
The FTA encouraged registrants to ensure that the tax return or the voluntary
disclosure is submitted before making the payment.
“If the registrant made the payment before filing the tax return or submitting
the voluntary disclosure, and they had outstanding administrative penalties in
their account, the system will settle the payable administrative penalties
first, since there is no outstanding payable tax in their account at the time of
making the payment,” it said.
The FTA said it is essential for taxable persons to pay their due payable tax
before the due date to avoid any late payment penalties. In the same regard, the
FTA clarified that bank transfers can take two or three working days to process
the payment; hence, the period must be taken into consideration to ensure that
FTA receives the payment before the due date.