UAE: Full list of fines for violations of corporate tax rules revealed

The UAE’s Ministry of Finance has announced the issuance of Cabinet Decision No. (75) of 2023 regarding administrative penalties for violations related to the Federal Decree-Law No. 47 of 2022 on the taxation of corporations and businesses.

The decision specifies administrative penalties that will be imposed by the Federal Tax Authority (FTA) for violations related to the application of the Corporate Tax Law. The penalties will come into effect from tomorrow (August 1, 2023).

Here is the complete list of penalties:

Question: What is fine for failure for conducting a business or business activity or having a tax obligation under the Tax Procedures Law or the Corporate Tax Law to keep the required records and other information?

Answer: One of the following penalties shall apply for the violation: Dh10,000 for each violation; Dh20,000 in each case of repeated violation within 24 months from the date of the last violation.

Question: What is the penalty for failure for conducting business or business activity or having a tax obligation under the Tax Procedures Law or the Corporate Tax Law to submit the data, records and documents related to tax in Arabic to the Authority when requested?

Answer: Dh5,000 will be levied for the violation.

Question: How much is the fine in case of failure of the registrant to submit a deregistration application within the timeframe specified in the Corporate Tax Law and its implementing decisions?

Answer: Dh1,000-Dh10,000 fine in case of late submission of the application.

Question: What are the penalties in case of failure of the registrant to inform the Authority of any case that may require the amendment of the information pertaining to tax records?

Answer: One of the following penalties shall apply – Dh1,000 for each violation; Dh5,000 in each case of repeated violation within 24 months from the date of the last violation.

Question: What is the penalty for failure of the legal representatives to provide notification of their appointment within the specified timeframes?

Answer: Dh 1,000 penalty will be levied for violating the law.

Question: In case of failure of the legal representative to file a tax return within the specified timeframes, what would be the penalty?

Answer: Dh500 for each month, or part thereof, for the first 12 months; Dh1,000 for each month, or part thereof, from the 13 month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the tax return must be submitted, and on the same date monthly thereafter.

Question: What is the penalty in case of failure of the registrant to submit a tax return within the timeframe?

Answer: Dh500 for each month, or part thereof, for the first 12 months; Dh1,000 for each month, or part thereof, from 13 month onwards. This penalty shall be imposed from the day following the expiry date of the timeframe within which the tax return must be submitted, and on the same date monthly thereafter.

Question: For failure of the taxable person to settle the payable tax, what penalty would they be subject to?

Answer: A monthly penalty of 14 per cent per annum, for each month or part thereof, on the unsettled payable tax amount from the day following the due date of payment and on the same date monthly thereafter. For this penalty, the due date of payment in the case of the voluntary disclosure and tax assessment shall be as follows: (1) 20 business days from the date of submission, in the case of a voluntary disclosure, and (2) 20 business days from the date of receipt, in the case of a tax assessment.

Question: What if the registrant submits an incorrect tax return?

Answer: Dh500 fine, unless the person corrects his tax return before the expiry of the deadline for the submission of the tax return.

Question: What is the penalty for the submission of a voluntary disclosure by the taxable person in relation to errors in the tax return, tax assessment or tax refund application pursuant to Clauses (1) and (2) of Article (10) of the Tax Procedures Law?

Answer: A monthly penalty of 1 per cent on the tax difference, for each month or part thereof, to be applied as of the date following the due date of the relevant tax return, the submission of the tax refund application, or the notification of the tax assessment and until the date the voluntary disclosure is submitted.

Question: What is fine for failure of the taxable person to submit a voluntary disclosure in relation to errors in the tax return, tax assessment or tax refund application pursuant to Clauses (1) and (2) of Article (10) of the Tax Procedures Law, before being notified by the Authority that it will be subject to a tax audit?

Answer: The following penalties shall apply: (1) A fixed penalty of 15 per cent on the tax difference; (2) A monthly penalty of 1 per cent on the tax difference, for each month or part thereof, to be applied as follows: (a) Where the taxable person submits a voluntary disclosure after being notified that it will be subject to a tax audit by the authority, the penalty shall be imposed for the period from the day following the due date of the relevant tax return, or the submission of the tax refund application or notification of the tax assessment and until the date the voluntary disclosure is submitted. (b) Where the taxable person fails to submit a voluntary disclosure, the penalty shall be imposed as of the date following the due date of the relevant tax return, or the submission of the tax refund application or notification of the tax assessment and until the date of issuance of the tax assessment.

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