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| 03 October, 2017

Fees and Fines: UAE's tax authority releases list of tax penalties and administrative charges

The United Arab Emirates Federal Tax Authority has issued a new list of charges and penalties for its tax regime

The United Arab Emirates Federal Tax Authority has issued a new list of charges and penalties for its tax regime

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Fines will range from 1,000 dirhams for a first offence of late filing up to 50,000 dirhams for repeated failures to keep records and tax-related information

The United Arab Emirates Federal Tax Authority (FTA) has announced a list of fees and fines that will be imposed on tax payers.

On Sunday, the UAE began implementing an excise tax on tobacco and energy drinks at a rate of 100 percent, and on fizzy drinks at a rate of 50 percent, with the exception of carbonated water.

The UAE is expected to implement a value-added tax (VAT) at a 5 percent rate on an array of goods and services starting next January. The new taxes are part of a wider GCC plan aimed at diversifying sources of income and decreasing reliance on oil revenues. 

The authority said in a press statement issued on Monday that tax registration services and the issuance of an electronic tax registration certificate will be free of charge. However a printed paper registration certificate will cost 500 UAE dirhams ($136.09). The registration and renewal fees for tax agents will cost 3,000 dirhams for a three-year period.

The registration and renewal fee for an accounting software provider will cost 10,000 dirhams per year, while registering of a designated zone will cost 2,000 dirhams yearly, the statement said.

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It said there will be no fees required for the registration of a warehouse keeper or for the issuing of an electronic warehouse keeper registration certificate, but an official printed certificate will again cost 500 dirhams.

The statement said that according to the country’s three recently-issued tax laws (the tax procedures law, the value-added tax law and the excise tax law), fines of no less than 500 dirhams and no more than triple the value of the tax on any transaction in question will be issued in the case of tax violations. Taxable persons - by the powers of the tax procedures law - have the right to appeal any administrative penalties.   

The statement also outlined a number of fines to be paid in the case of violations, including a fine of 10,000 dirhams for a first-time failure to keep records and tax-related information, which will increase to 50,000 dirhams in the case of repeated offences.

A failure to submit data, records or documents related to tax in Arabic when requested will be subjected to a fine of 20,000 dirhams.

A failure by a taxable person or their legal representative to file a tax return on time will also incur a 1,000 dirham penalty for a first offence, which will double to 2,000 dirhams if the offence is repeated within 12 months.

For more details and the full list of penalties and fines, click here.

For Zawya’s special coverage on VAT, click here.

© Zawya 2017