UAE VAT Updates – Timeline for Re-determination of Administrative Penalties extended until 31st December 2022
The UAE Cabinet issued Cabinet Decision No. 108 of 2021 (Decision) amending Article 3 of Cabinet Decision No. 49 of 2021 to extend the timeline for the re-determination of administrative penalties until 31st December 2022. The initial timeline was 31st December 2021. This Decision is effective from 1st January 2022.
Consequently, the FTA released VAT Public Clarification TAXP004 that provides guidance on the conditions to be fulfilled to qualify for the re-determination of administrative penalties
The Public Clarification TAXP004 replaces the earlier issued Public Clarification TAXP002 on a similar subject.
All the following conditions should be met to benefit from the re-determination program:
- The administrative penalties should have been imposed before 28th June 2021.
- The Taxpayer has not settled the administrative penalties in full before 28th June 2021.
- The Taxpayer must settle 30% of the total unsettled administrative penalties (imposed before 28th June 2021) and all the payable tax by 31st December 2022, regardless of whether such tax was payable before or after 28th June 2021.
The FTA will review and re-determine the penalty within 30 business days from 31st December 2022.
For the Taxpayers who fulfilled the conditions within the initial timeline of 31st December 2021, the FTA would review and re-determine the penalty within 30 business days from 31st December 2021.
The FTA has clarified the concept of “settlement” to mean that the FTA must have received the relevant amounts.
The extension of the timeline for re-determination of administrative penalties would provide relief to the Taxpayers who missed the initial deadline of 31st December 2021. The Taxpayers are encouraged to take advantage of this extended timeline.
HOW CAN WE HELP?
Rethink as an entity provides VAT advisory, optimization, registration, implementation, compliance, and training services in UAE, Bahrain, KSA, and the GCC.
Our team of senior qualified tax advisors, finance experts, and tax accountants are happy to provide practical help and advice to ensure timely and cost-effective VAT services.
Based on our local and international experience, we understand that VAT is a complex tax and would certainly suffer numerous changes in the upcoming years. Rethink’s VAT services are aimed to suit both basic and complex returns for SMEs and larger enterprises.
WHO ARE WE?
Re/think is a boutique accounting, audit, advisory, regulatory compliance, and tax advisory firm with offices in Dubai and Abu Dhabi (ADGM) focused on providing businesses of varying sizes with timely, proactive, and customized business solutions from start-up and early development to the latest stages of a business lifecycle.
Associate Director (Indirect Tax)