Penalty relief for businesses missing VAT deadline
The decision has been taken due to lack of readiness of some businesses during the first phase of VAT implementation.
The Federal Tax Authority on Wednesday exempted businesses and individuals from administrative penalty for non-registration of VAT, and has now asked them to register by April 30.
Chairing an FTA meeting, Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE's Minister of Finance, stated that response to the tax system by the business sectors and all segments of society are very satisfactory and there is a steady increase in the tax compliance ratios.
Tax experts noted that SMEs, free zone companies and branches of foreign companies will benefit from the FTA's decision to exempt them from the administrative penalty of Dh20,000 for non-registration of new consumption levy introduced this year.
Surandar Jesrani, CEO, Morison MJS Tax Consultancy, noted that entities like free zone companies and branches of foreign companies will benefit as they were expecting some relaxations or exemption from VAT and hence could not register before the given deadline of December 4, 2017.
Thomas Vanhee, partner, Aurifer Middle East Tax, believes that the FTA's announcement concerns mainly smaller businesses.
The FTA said 260,000 out of 350,000 expected firms, had registered in January.
The FTA's board also reviewed results of the tourist refund tender as the refund project will cover outlets in the country.
Sheikh Hamdan also reviewed the outcome of the tourist refund tender.
The integrated refund system will cover outlets and shops in the country. The board urged to complete procedures for implementing the system.
The board also reviewed the clarifications and directives issued by the authority regarding the compliance of businesses with taxes and penalties, based on FTA's jurisdiction in administration, collection and enforcement of taxes under the Federal Decree-Law No. (13) of 2016 on the establishment of the Federal Tax Authority.
The Board of Directors examined and evaluated the progress made on existing projects. These include an integrated electronic system of tax administration; the results of the registration for excise tax and VAT; and the plan to increase awareness among business sectors and consumers about the tax system and its mechanisms as well as the rights and responsibilities of all parties concerned.
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