Administrative Penalties of Tax Laws in UAE

LIST OF PENALTIES UNDER UAE TAX LAWS

A comprehensive list of all administrative penalties for violations of tax laws in the UAE is given.

1. VIOLATIONS RELATED TO TAX PROCEDURES

S.NO

SUBJECT WORD

VIOLATION OF LAW

PENALTIES (IN AED)

WILL BORNE BY

1Record KeepingFailure to keep the required records specified by the tax procedures law and the tax law.
  • 10,000 for the first time
  • 50,000 for each repeat violation
Registrant
2Record submission in ArabicFailure to submit the required records in Arabic when requested by the Authority
  • 20,000
Registrant
3RegistrationFailure to submit a registration application within the timeframe specified by the tax law.
  • 20,000
The person liable to be registered
4DeregistrationFailure to submit a deregistration application within the timeframe specified by the tax law.
  • 10,000
Registrant
5Amendment to tax recordsFailure to inform the Authority of an amendment to tax records that need to be submitted
  • 5,000 for the first time.
  • 15,000 in case of repetition.
Registrant
6Appointment of legal representativeFailure to notify the authority that a legal representative has been appointed for the business within the specified timeframe.
  • 20,000
Legal representative
7Failure to file the tax return by legal representativeFailure of the legal representative to file a tax return within the specified timeframe.
  • 1,000 for the first time.
  • 2,000 in case of repetition within 24 months.
legal representative
8Failure to File tax return by RegistrantFailure of the Registrant to submit a tax return within the timeframe specified by the tax law.
  • 1,000 for the first time.
  • 2,000 in case of repetition within 24 months
Registrant
9

 

Payment of taxFailure to pay the tax stated in the tax return/tax assessment form within the timeframe specified by the tax law.
  • The taxable person will incur a late payment penalty as follows
  • 2% of the unpaid tax is due immediately.
  • 4% is due on the seventh day following the deadline for payment.
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300% of payable tax.
Registrant
10Submission of incorrect tax returnThe submission of incorrect tax returns by the Registrant.

 

 

Two penalties are applied:

1- Fixed penalty

  • 3,000 for the first time
  • 5,000 in case of repetition

2– Percentage-based penalty
A percentage-based penalty shall be applied to the amount unpaid to the Authority due to the error and resulting to tax benefits 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 a 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.
Registrant
11Disclosure of errors in a tax return, tax assessment, or refund applicationVoluntary disclosure by a business of errors in a VAT tax return, tax assessment, or refund applicationTwo penalties are applied

1- Fixed penalty

  • 3,000 for the first time
  • 5,000 in case of repetition

2– Percentage-based penalty
A percentage-based penalty shall be applied to the amount unpaid to the Authority due to the error as follows.

  • (50%) if the person/taxpayer does not make 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 person/taxpayer makes the voluntary disclosure after being notified of the tax audit but before the Authority starts of the tax audit.
  • (5%) if the person/taxpayer makes a voluntary disclosure before being notified of the tax audit by the Authority.
Taxpayer/person
12Voluntarily disclose of errors before tax auditFailure of a business to voluntarily disclose errors in a tax return, tax assessment, or refund application before a tax audit.Two penalties are applied

1- Fixed penalty

  • 3,000 for the first time
  • 5,000 in case of repetition

2– Percentage-based penalty
50% of the amount unpaid to the Authority due to the error.

Taxpayer/person
13Failure to facilitate tax auditFailure of a person or business to facilitate the work of the tax auditor
  • 20,000
Taxpayer/person
14The failure to calculate Tax on behalf of another Person

 

Failure of the Registrant to calculate tax on behalf of another person as required under the tax law
  • 2% of the unpaid tax is due immediately once the payment is late.
  • 4% of the amount of tax which is still unpaid is due on the seventh day following the deadline for payment
  • 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.
Registrant
15Failure to account for tax on import of goodsFailure to account for tax due on the import of goods as required under the tax law.
  • 50% of unpaid or undeclared tax
Registrant


2. VIOLATIONS RELATED TO VAT

S.NOSUBJECT WORDVIOLATION OF LAWPENALTIES (IN AED)WILL BORNE BY
1Prices inclusive of TaxFailure by the Taxable Person/business to display prices Inclusive of Tax.
  • 15,000
Taxable Person
2Tax based on marginFailure by the Taxable Person/business to notify the Authority of applying Tax based on the margin.
  • 2,500
Taxable Person
3Designated ZonesFailure by the Taxable Person to provide the Authority with price lists for the Excise Goods produced, imported or sold therebyThe penalty shall be the higher

  • 50,000
  • or 50% of the tax, if any, unpaid on the goods as the result of the violation
Taxable Person
4Tax invoicesFailure by the taxable person/business to issue a tax invoice or alternative document when making any supply
  • 5,000 for each missing tax credit note or alternative document
Taxable Person
5Electronic tax invoicesFailure by the taxable person/business 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
Taxable Person


3. VIOLATIONS RELATED TO EXCISE TAX

S.NOSUBJECT WORDVIOLATION OF LAWPENALTIES (IN AED)WILL BORNE BY
1Prices Inclusive of TaxFailure by the Taxable Person/business to display prices Inclusive of Tax.
  • 15,000
Taxable Person
2Designated ZonesFailure to comply with the conditions and procedures related to transfer the Excise Goods from one Designated Zone to another Designated Zone, and the mechanism of processing and storing of such Excise Goods.The penalty shall be the higher

  • 50,000
  • or 50% of the tax, if any, unpaid on the goods as the result of the violation
Taxable Person
3Provision of price list for excise goods.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
Taxable Person

Read more about VAT Registration Questions Answers