UAE VAT Update – The UAE Cabinet has amended the Executive Regulation of Federal Law on Tax Procedures
On Wednesday, the UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, met to discuss its strategies that were concerning the UAE VAT Law.
During the meeting, the Cabinet approved the amendment of the Executive Regulations to the Federal Tax Procedures Law. The official text of the amended Executive Regulations is yet to be published; however, Khaleej Times has announced the following amendments:
- Extended timeline for the tax notification from 10 to 40 working days
As per the UAE Tax procedure, by issuing the tax notification, the FTA notify a taxpayer or his Tax Agent or Legal Representative of any decisions or procedures issued by the Authority through the means stated in the Law and the Cabinet Decision.
With the extension of the timeline for the tax notification, the FTA must notify the taxpayer of any decisions or procedures concerning the taxpayer within 40 working days instead of 10 as was prescribed in the previous version of the Executive Regulations.
- The extended time limit for issuing the decision of the Federal Tax Authority to reduce or exempt administrative penalties from 20 to 40 working days
As per the Executive Regulations to the Federal Tax Procedures Law, the FTA may reduce or waive any administrative penalties imposed on the taxpayer whose violation of the provisions of the Law or Tax Law was proved.
The amendment extends the time limit for the decision to be made by the FTA regarding the reduction of the Administrative Penalties or exemption from 20 to 40 working days from the date of receiving the application.
- Reduced administrative penalties
As of this writing, no further information on the reduced administrative penalties. Since the Cabinet Resolution on Administrative Penalties for Violations of Tax Laws in the UAE covers the administrative penalties, it is expected that the said Resolution will be amended with the reduced penalties soon.
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