VAT Penalty Reconsideration

VAT Penalty Reconsideration

VAT Penalty Reconsideration is a process by which businesses can appeal against a penalty imposed on them by tax authorities for a violation of Value Added Tax (VAT) regulations. This process involves submitting a formal request to the tax authority, providing relevant evidence to support the appeal, and making a case for why the penalty should be reconsidered or reduced.

Effective communication and clear documentation are crucial in this process, as it requires a strong understanding of legal and regulatory frameworks surrounding VAT. With the help of VAT experts and legal advisors, businesses can navigate the VAT Penalty Reconsideration process and potentially avoid or reduce the financial burden of penalties.

Waiver From VAT Fines

In the United Arab Emirates, all taxable companies are obliged to comply with the Tax Procedures Act. If a natural or legal person fails to comply with the VAT rules, the FTA imposes a penalty. However, the Federal Tax Authority has given the taxpayer the possibility to reduce or waive administrative penalties in the UAE. A taxpayer can apply for a VAT review and apply for an exemption from the VAT penalty.

Our Bestax chartered accountants and tax advisors in Dubai provide exclusive VAT services in all major sectors. Our priority is to protect our local and international clients from large fines and penalties. We understand the VAT waiver is allowed.

Also, Check: VAT Deregistration in The UAE

VAT Penalty Reconsideration Request

The VAT penalty reconsideration application is available on the official portal of the Federal Tax Authority. Its purpose is to inform the authorities of an error or omission in filing a VAT Return or VAT Refund & that the taxpayer is not satisfied with the FTA’s decision to impose a penalty. The VAT Penalty Review is a proactive approach to removing VAT penalties and sanctions.

Application For The Waiver of a VAT Penalty

A VAT penalty waiver is an official document that can be used to settle VAT penalties and interest for non-compliance with United Arab Emirates legislation. This application is submitted if you agree with the authority’s decision but use the methods previously set out by the FTA to waive the penalty. Any taxpayer may apply for a waiver, but it is up to the FTA to approve or reject the VAT penalty waiver application. The supervisory authorities will consider all your evidence, justifications, and documents with a view to abolishing or reducing the penalty where possible.

Purpose of Cancelling The Penalty

The main purpose of the VAT penalty waiver form is to enable taxpayers to prove their VAT non-compliance before the FTA. As the UAE authorities have strict laws and deadlines for filing VAT returns, VAT refunds, VAT Registration, etc., if a taxable company fails to comply with any of them, it may be subject to a large penalty. Over time, this penalty continues to accumulate and becomes a burden on the taxpayer’s pocket.

Therefore, the Federal Tax Authority allows companies to appeal for exemption from the VAT penalty in the UAE. Although a taxpayer can apply for an exemption, this does not mean that the request will be granted. It will ultimately be the FTA’s decision whether to cancel the penalty or keep it in place, and this will all happen after it has considered your evidence, documents, etc. Our tax advisers will help you prepare all the necessary documents to maximize the chances of your appeal being successful.

Also, Check: VAT Voluntary Disclosure

Rules For Appealing Against Immunity From Fines

Cabinet Decision No. 51 of 2021 amends certain provisions of Article 26 of Cabinet Decision No. 36 on the enforcement of Federal Law No. 7 of 2017 on tax procedures. FTA may reduce or waive the fine and interest depending on the grounds and evidence. The waiver of VAT penalties in the UAE has certain necessary conditions that must be met before application.

  • Applicants wishing to obtain a waiver of penalties and interest must support their request with appropriate evidence.
  • The taxpayer has paid the main tax
  • The taxpayer has never been in arrears with the payment of other taxes
  • It is essential that the taxpayer has not incurred any administrative penalties in the last two years.
  • No exemption is granted for penalties and interest incurred as a result of fraud or Tax Evasion.

Penalty Waiver Request Process In The UAE

An application for the cancellation of a VAT penalty is submitted online via the FTA’s official website. On the portal, you need to fill in a few fields on the form and attach verified evidence to the application to convincingly challenge the penalty imposed by the Federal Tax Authority. Applications for exemption from fines are submitted via:

1-Application for review of a VAT penalty.

2-Appeal to the TDRC (Dubai Tax Dispute Resolution Committee).

3-Application for reduction/exemption.

4-The time limit for requesting an exemption.

There is a time limit for applying for a reduction or exemption of an administrative penalty. The taxpayer must submit the request within 40 working days of the FTA penalty being incurred. The new Decision establishes a formal application procedure for requesting an exemption approved by the FTA. The FTA will notify the applicant of any further matters by email.

Supporting Documents Required For The VAT Review

To make your case convincing, you need to prepare a list of valid documents for reviewing a VAT penalty in the UAE. This helps the authorities to accept your appeal and cancel the VAT penalty as quickly as possible. The following documents are required to submit the UAE VAT penalty review form:

  • A copy of the passport of the authorized signatory
  • Emirati identity card of the authorized signatory
  • Proof of authorization (POA or MOA).
  • An official letter with legal references
  • VAT penalty review deadline

In accordance with Section 27 of Federal Law No. (7) Of 2017 on Tax Procedures, an application for review of a VAT penalty must be submitted within 40 days after the FTA has imposed the penalty. After the application has been submitted, the FTA will reply within 20 working days on the review of the VAT penalty.

Within this period, the regulatory authorities will review their decision, assess the case, and examine all supporting documents. If the applicant’s appeal is accepted, he will receive a confirmation email from the FTA and the amount of the fine will be transferred to the applicant’s FTA account.

How Can BestaxCA Help You to Waive The Fine?

BestaxCA is one of the leading accounting and tax advisory firms in Dubai, United Arab Emirates. Our team of Bestax chartered accountants assists businesses in the relevant VAT provisions as per the tax procedure law. We will do everything in our power to ensure that you do not receive penalties for non-compliance with FTA requirements. Our tax experts provide full guidance on the preparation and submission of a VAT penalty waiver application in accordance with the standards.

We collect all the documents needed to prove your waiver, as any mistake can result in the claim being rejected or delayed. We look into your financial records to complicate the legal procedure for canceling the penalty. So take advantage of BestaxCA and waive the VAT penalties and interest that have accrued. Any individual or company can contact us for more information: Email: