The Administrative Penalties for Violation of Tax Laws in the UAE

1

Failure of the Person conducting Business or who has an obligation under the Tax Procedures Law or the Tax Law to keep the required records and other information specified in the Tax Procedures Law and the Tax Law.

One of the following two penalties shall be imposed:

1. 1,000 for each violation.

2. 20,000 in each case of repeated violation within 24 months from the date of the last violation.

2

Failure of the Person conducting Business or who has an obligation under the Tax Procedures Law or the Tax Law to submit the data, records, and documents related to tax in Arabic to the Authority when requested.

5,000

3

Failure of the Taxable Person to submit a registration application within the timeframe specified in the Tax Law.

10,000

4

Failure of the Registrant to submit a deregistration application within the timeframe specified in the Tax Law.^[3]

1,000 in case of late submission of the application and on the same date monthly, up to a maximum of 10,000.

5

Failure of the Registrant to inform the Authority of any case that may require the amendment of the information pertaining to his tax record kept by Authority.

One of the following two penalties shall be imposed:

1. 1,000 for each violation.

2. 5,000 in each case of repeated violation within 24 months from the date of the last violation.

6

Failure of the Legal Representative of the Taxable Person to provide Notification of their appointment within the specified timeframes, in which case the Penalties will be due from the Legal Representative's own funds.

1,000

7

Failure of the Legal Representative for the Taxable Person to file a Tax Return within the specified timeframes, in which case the Penalties will be due from the Legal Representative's own funds.

1,000 for the first time.

2,000 in case of repetition within 24 months.

8

Failure of the Registrant to submit the Tax Return within the timeframe specified in the Tax Law.

1,000 for the first time.

2,000 in case of repetition within 24 months.

9

Failure of the Taxable Person to settle the Payable Tax within the timeframe specified in the Tax Law.^[4]

1. A monthly penalty of (14%) per annum, for each month or part thereof, imposed on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter.

2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows:

   1. 20 business days from the date of submission, in the case of a Voluntary Disclosure.

   2. 20 business days from the date of receipt, in the case of a Tax Assessment.

10

The Registrant submits an incorrect Tax Return.

500, unless the Registrant takes one of the following actions:

1. Corrects his Tax Return within the deadline specified for submitting the Tax Return pursuant to the Tax Law.

2. Submits a Voluntary Disclosure to correct the Tax Return without resulting in a difference in the amount of Due Tax.

11

The submission of a Voluntary Disclosure by the Taxable Person or the Taxpayer on errors in the Tax Return, Tax Assessment or tax refund application pursuant to Clauses 1 and 2 of Article 10 of the Tax Procedures Law.

A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be applied as of the date following the due date of the Tax Return, or submission of the relevant tax refund application until the date of the Voluntary Disclosure is submitted.

12

Failure of the Taxable Person or the Taxpayer to submit a Voluntary Disclosure in relation to errors in the Tax Return, Tax Assessment, or tax refund application before being notified by the Authority that it will be subject to a Tax Audit.

The two following penalties shall be imposed:

1. A fixed penalty of 15% on the Tax Difference.

2. A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be calculated as follows:

   1. Where the Taxable Person submits a Voluntary Disclosure after being notified that it will be subject to a Tax Audit by the Authority, the penalty shall be imposed for the period from the day following the due date of the Tax Return, or the submission of the relevant tax refund application until the date of submitting the Voluntary Disclosure.

   2. Where the Taxable Person fails to submit a Voluntary Disclosure, the penalty shall be imposed as of the date following the due date of the Tax Return, or the submission of the relevant tax refund application until the date of issuance of the Tax Assessment.

13

Failure of the Person subject to Tax Audit, his Tax Agent, or Legal Representative to offer facilitation to the Tax Auditor in violation of the provisions of Article 20 of the Tax Procedures Law, provided that the penalties in this case will be due from the Person's, his Legal Representative's, or Tax Agent's own funds, as applicable.

20,000

14

Failure of the Registrant to calculate tax on behalf of another Person where the Registrant Taxable Person is obliged to do so under the Tax Law.^[5]

1. A monthly penalty of 14% per annum, for each month or part thereof, imposed on the unsettled amount of Payable Tax, from the day following the due date of payment and on the same date monthly thereafter.

2. For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows:

   1. 20 business days from the date of submission, in the case of a Voluntary Disclosure.

   2. 20 business days from the date of receipt, in the case of a Tax Assessment.

15

The failure of the Person to calculate any tax that may be due on the import of goods as per the Tax Law.

50% of the unpaid or undeclared Tax.

1

Failure of the Taxable Person to display prices inclusive of Tax.

5,000

2

Failure to comply with the conditions and procedures of transferring Excise Goods from a Designated Zone to another Designated Zone, and the mechanism of preserving, storing, and processing such Excise Goods.

The penalty shall be the higher of 50,000 or 50% of the Tax, if applicable, chargeable on the goods in relation to the violation.

3

Failure of the Taxable Person to provide the Authority with the price lists of the Excise Good that it produces, imports or sells.

5,000 for the first time. 10,000 in case of repetition.

1

Failure of the Taxable Person to display prices inclusive of Tax.

5,000

2

Failure of the Taxable Person to notify the Authority of applying tax based on Margin.

2,500

3

Failure to comply with the required conditions and procedures related to keeping the Goods in a Designated Zone or moving them to another Designated Zone.

The penalty shall be the higher of 50,000 or 50% of the Tax, if applicable, chargeable on the goods in relation to the violation.

4

Failure of the Taxable Person to issue a Tax Invoice or the alternative document when making any supply within the period legally specified.

2,500 for each detected case.

5

Failure of the Taxable Person to issue a Tax Credit Note or the alternative document within the period legally specified.

2,500 for each detected case.

6

Failure of the Taxable Person to comply with the conditions and procedures regarding the issuance of a Tax Invoice and a Tax Credit Note electronically.

2,500 for each detected case.