PENALTIES FOR VIOLATION OF VAT
VAT fines and penalties in UAE is imposed by Federal Tax Authority (FTA). Businesses in UAE must abide by all the rules and regulations of FTA in order to avoid heavy VAT fines and penalties. FTA has officially confirmed the complete list of all the administrative VAT fines and penalties. Every taxpayer should be aware of the circumstances that might lead to penalties which is imposed by FTA.
Administrative penalties shall be imposed on the violation listed below:
- Failure by the taxable person to display prices inclusive of tax would result in administrative penalty of AED 15,000.
- Failure by the taxable person to notify the authority of applying tax based on the margin results in penalty of AED 2,500.
- Failure to comply with conditions and procedures related to keeping the goods in a designated zone or moving them to another designated zone on violation of this, the penalty shall be higher of AED 50,000 or 50% of tax if any chargeable in respect of the goods as the result of violation.
- Failure by the taxable person to issue the tax invoice or an alternative document when making any supply this would result in penalty of AED 5,000 for each tax invoice or alternative document.
- Failure by the taxable person to issue a tax on credit note or an alternative document gives penalty of AED 5,000 for each tax credit note or alternative document.
- Failure by the taxable person to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes gives penalties of AED 5,000 for each incorrect document.
Who is taxable person?
A person who is subject to tax under the provision of the relevant tax law.