UAE: Federal Tax Authority reminds taxpayers to benefit from administrative penalty re-determination facility before December 31

The Federal Tax Authority (FTA) has urged registered taxpayers in the UAE to benefit from the facility to re-determine administrative penalties on tax violations to be 30 per cent of the total outstanding amount of administrative penalties that were not paid before June 28, 2021.

The FTA stressed that the facility has a set deadline and that taxpayers who are eligible to benefit from the decision must complete all related procedures through the EmaraTax portal before December 31 to benefit from these facilities.

After the deadline, tax registrants who have outstanding administrative penalties from before June 28, 2021, will not be eligible to avail the re-determination facility and will be required to pay their penalties in total, instead of just 30 per cent of them, if they meet the required conditions within the deadline set by the Cabinet Decision on Re-Determining Administrative Penalties on Tax Violations in the UAE.

The decision outlined three conditions that need to be met in order to benefit from the re-determination of administrative penalties imposed before June 28, 2021. First, the administrative penalty must be imposed under Cabinet Decision No. (40) of 2017 before June 28, 2021, and remain outstanding. Second, the tax registrant needs to have settled all due Payable Tax by December 31, 2022, with no remaining outstanding taxes by end of 2022. And third, the tax registrant must have paid 30 per cent of the total unsettled administrative penalties imposed before June 28, 2021, no later than December 31, 2022.

Registrants can visit their Amnesty Dashboard on their EmaraTax accounts and follow the process to make the payment. Upon going to the payments screen on EmaraTax, registrants may select administrative penalties unpaid before the date of June 28, 2021. Registrants may either pay 30 per cent for each of the administrative penalty line item or select such line items (either full or partial) that equate to 30 per cent of such unpaid administrative penalties. Where the required conditions are met, the new value of the penalties will be equal to 30 per cent of the total unpaid penalties, which will appear on the registrant's account on the EmaraTax portal after December 31, 2022.

The Federal Tax Authority indicated that the cabinet decision aims to support registrants in the tax system to fulfil their tax obligations, providing a great opportunity to assist businesses in re-determining administrative penalties to be equal to 30 per cent of total unpaid fines, according to the conditions set in the decision.

The authority explained that in order to ensure the smooth and accurate implementation of the mechanism to re-determine administrative fines, those concerned can view the general clarification issued about the Decision on the FTA website, which includes a detailed explanation supported by examples regarding the procedure for re-determining administrative penalties imposed before June 28, 2021.

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