VAT Penalties/fine & Reconsideration in United Arab Emirates
If a taxable person is in dispute with Federal Tax Authority (FTA) in respect of its tax liability, there is provision in UAE VAT LAW to ask for them to be reconsidered. This request application should be in Arabic script only that can be submitted by a Registrant/tax agent containing all the details of case including evidence, reasoning and any other details that can establish your case to FTA.
FTA is quite responsive and, in most cases, when the application is comprehensive and containing proper evidence FTA tend to remove penalties partially or completely.
As per Article-27 of Federal Law No. (7) Of 2017 on Tax Procedures, the application must be submitted within 20 business days from the date the applicant is notified of the decision. The application can be submitted by using an online FTA portal. The application is only acceptable in the Arabic language (all supporting documents, certifications, etc. must be provided in Arabic).
Once Application is submitted successfully than FTA appoints a representative to review a request for Vat reconsideration with Tax Dispute Resolution Committee. Normal decision time for any application is 20 business days from receipt of the application; the applicant will be informed of the decision five days thereafter. Authority may ask for more documents/clarification from the applicant.
Documents required for application are:
· Authorized Signatory Passport copy
· Authorized signatory Emirates ID Copy
· Authorization proof i.e., MOA/POA
· Formal case study letter dealing with the facts along with supporting documents with legal references.
A case study letter with supporting documents
If the application is approved, the penalty amount will be reversed on applicant FTA “VAT Transaction” ledger and the applicant will receive a confirmation email from the FTA. If the application is rejected one might turn to the “Tax Disputes Resolution Committee” for further reconsideration.
AL Dhaheri Jones & Clark registered tax agency with FTA supporting all its businesses be VAT compliant around the UAE offering VAT solutions to companies. Please contact us for further information