The violation of provisions of UAE VAT law leads to certain VAT fines and penalties in UAE. It’s significant that every tax payer should know the circumstances that lead to the imposition of these penalties by FTA or federal tax authority.
VAT fines in UAE are charged for non-compliance of the administrative procedure that a taxable person has to follow as per the UAE tax laws and regulations.
Consultation and Guidelines
VAT is a common consumption tax and usually, applied to all goods and services. Since most of the management of the companies are aware of the diversifying economy and revenue generation, the government have decided to adopt Value-added Tax or VAT. UAE adopts VAT for almost all goods and services, except healthcare, food, and education. Though VAT burden lies on the end customer, business entities should follow the system, processes, and procedures to comply with the new legal requirement effective from January 2018.
Requirement of New commercial company Law No-2 of 2015
As per article no 26 of UAE company law – all the companies are required to keep their accounting records for a period of 5 years from the end of financial year of the company.
According to article 348 – failure to keep the accounting records that explain the entity’s transactions, the company will have to pay fine from AED 50,000 to AED 500,000
According to article 349 – if the company fails to keep their accounting records for the period of 5 years, the government will impose fine ranging from AED 20,000 to 200,000.
Normal requirements under VAT system
- During the purchase of goods or availing of services, make sure that taxable items are properly charged by the supplier and details are mentioned in the invoice.
- During the sale or provision of services apply rate on the sale value and reduce the input tax to reach the amount to be paid.
- Make the payment of tax computed within the stipulated time given by the government.
- Filing VAT returns to the Government with relevant information within the stipulated time period
- Maintain proper invoice, stock record, VAT returns, accounts, and other relevant records to justify the tax paid at the time of purchase.
All the above listed functions require more control and safety while handling stock, invoice, and other records. Accountants ensure proper filing system, upgradations of software, compliance of due dates for collection, remittance of tax, etc. Here, accountant plays a huge role in compliance of VAT as well as maintenance of accounts and records as per the company laws, etc.
How A&A Associate can help?
A&A Associate is one of the registered tax agents with Federal Tax authority. We serve as one of the leading and certified tax agent in UAE with handful of potential clients.
VAT fines in UAE requires great attention, if your company has been charged with any of the VAT fines, our tax experts will assist you in handling those issues and waive off those fines or penalties. We take care of all the concerns related to VAT fines in UAE and provide timely advice to deal with latest changes in the VAT rules and regulations. Our tax professionals are highly-qualified to handle with UAE tax law and practical implementation of VAT in UAE.
We understand that every business is different and so, we work on customized solutions according to our client’s business needs. Grow your business by avoiding VAT fines in UAE!