Abu Dhabi: UAE Government-owned entity responsible for the administration, collection and enforcement of federal taxes, the Federal Tax Authority (FTA) has urged tax payers in the country to utilize the latest extension of grace period offered by the Cabinet with respect to the re-determination of administrative penalties on violating tax laws until 31st December, 2022, which would make the amount of the total unpaid penalties due until 28th June, 2021 equal to 30 percent of such unpaid penalties, provided the conditions set by the Cabinet Decision are met.
The Authority reiterated the extension provides an opportunity for the business sector to benefit from the reduction of the administrative penalties.
According to the ruling, the tax payer who was not able to fulfil the conditions to benefit from redetermination before 31st December 2021, may fulfil the conditions before 31st December, 2022. The FTA called tax registrants to fulfil the requirement to pay the full tax payable, and 30 percent of the total unpaid administrative penalties that were imposed before 28th June, 2021.
The Federal Authority is expected to determine the procedures for implementing the provisions related to the re-determination of administrative penalties imposed for violating tax laws. The Authority confirmed that administrative penalties imposed on the tax registrant will be redetermined within a maximum of 30 business days from the dates specified in the Cabinet Decision, providing all conditions are met.
CONDITIONS BY FTA
- The administrative penalty should have been imposed under Cabinet Decision No. 40 of 2017 before 28th June, 2021, and the amount due was not settled in full before that date.
- The tax registrant has settled all payable tax by 31st December, 2022 (which means that the registrant must not have any tax due at the end of year 2022).
- The tax registrant has settled 30 percent of total unpaid administrative penalties due until 28th June, 2021, no later than 31st December, 2022.
The Tax Authority elaborated that the actual values resulting from the re-determination of administrative penalties have already been reflected in the accounts of many eligible tax registrants who, by 31st December 2021, met the conditions specified per Cabinet Decision No. 49 of 2021 on amending some provisions of the Cabinet Decision regarding Administrative Penalties for Violation of Tax Laws in the UAE, which came into effect on 28th June, 2021.
The body has already provisioned the new values after re-determination to appear on the accounts of registrants on the FTA’s e-Services portal. Meanwhile, registrants were also informed by emails that the re-determination process had been completed.
FTA urged tax registrants who received notifications from the Authority to provide supporting data and submit the required information without delay so that the FTA team may complete the procedures for reviewing such records and implement the re-determination of administrative penalties on the accounts of eligible registrants.