January 28, 2019

Dubai is just like any other society which is governed by strict taxation laws. The Federal Tax Authority is quite stringent and penalizes anyone who fails to ensure tax compliance.

Here are the conditions in which FTA shows zero tolerance against businesses and individuals and imposes fines.

Non-registration fines

In case a business which is eligible to pay vat in Dubai is unable to register on the FTA portal within the time frame specified by FTA, they will be fined 20,000 AED. Those registered firms which will fail to submit deregistration applications within the given time will have to pay 10,000 AED.

Late filing of tax/returns

Those businesses which generate revenue of over 150 million AED need to file their monthly returns. On the other hand, those businesses which have a turnover of less than 150 million AED are required to file their returns and pay taxes on a quarterly basis.

In case a VAT online registrant doesn’t file a tax return within the announced time, he will have to pay 1000 AED for the first time and 2000 AED if unable to file within 24 months.

If a person who falls under the tax category doesn’t pay taxes within the specified time, he will pay:

• 2% of the unpaid tax in case, the payment is submitted within the one week of the deadline
• 4% of the unpaid tax on the seventh day or beyond following the payment deadline
• 1% daily penalty on due tax amount in case the tax isn’t paid until one month following the deadline of payment

Non-disclosure of tax which is due on imports

According to the law, if a taxpayer is unable to account for any tax on goods import, he will be liable to pay 50% of the unpaid tax.

Submission of an incorrect tax return or non-disclosure of errors in tax returns

When a taxpayer doesn’t disclose errors in the returns filed by him, he will be fined 3000 AED for the first time and if he repeats it, a charge of 5000 AED will be imposed. When the taxpayer discloses any errors voluntarily but doesn’t provide correct information, then a fine of 3000 AED for the first time and 5000 AED for the second time will be imposed.

Non-disclosure of any errors in tax records

Those registrants who will fail to inform about any amendments needed in their record to FTA will be fined an amount of 5000 AED for the first time and on repetition of this offense will be fined 15000 AED.

Wrong pricing of items

In Dubai, a business will be levied a fine of 15000 AED in case they don’t display the right price of items which is inclusive of the excise duty.