There are two types of penalties which can be imposed for failing to comply with the below conditions respectively :

Administrative penalties:

1.Intended to address noncompliance.

2. AED500 < Penalty < 3 times the amount of tax for which penalty was levied

3. FTA has authority to waive or reduce penalties at its discretion

4. FTA has authority to waive or reduce penalties at its discretion

5. Examples of violations include:-

  • Does not maintain records.
  • Fails to submit data in Arabic when requested.
  • Does not submit VAT returns on time.

Tax evasion penalties:

1. Intended to address tax evasion.

2. Tax evasion is when a person uses illegal means to reduce the tax dues.

3. Penalty < 5 times the amount of tax for which penalty was levied & prison sentence.

4. This doesn’t prevent other penalties being raised under other laws.

5. Examples of violations include:-

  • Deliberately provides false information to the FTA
  • Deliberately conceals or destroys documents that were supposed to be submitted to the FTA.

We, at msi Alnoman and Ravi, are qualified to assist you through every step for your business. Our thorough knowledge in this field is ideal to guide your business, minimizing risk, to benefit your business.

Stay posted to know more about other VAT rules.To find more information on VAT you can visit the following:–

    1. Ministry of Finance
    2. Introduction to VAT
    3. Understanding VAT
    4. What do we need to when VAT comes into effect?
    5. Special VAT rules
    6. Reverse Charge Mechanism
    7. Categories of VAT
    8. Administration of VAT -FTA
    9. Time of supply
    10. What is supply
    11. FTA

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