Redetermination of Administrative Penalties Levied Prior to the 28th of June 2021

Just to give a brief background, The UAE Cabinet issued Decision No. 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws and allows for a redetermination of some of the penalties already imposed.

As a relief measure to help businessesCabinet Decision No. 49 of 2021 gives the FTA (Federal Tax Authority) ability to redetermine the amounts of unsettled payable administrative penalties, whichwereimposed on registrants based on the penalty rules listed in Cabinet Decision No. 40 of 2017.

To benefit from the redetermination, all the following conditions must be met:

1. The administrative penalties as per the Cabinet Decision No. 40 of 2017 have been imposed on the registrant or taxable person before the effective date of Cabinet Decision No. 49 of 2021 (i.e., before 28 June 2021);
2. The business involved settles all payable tax by December 31, 2021;
3. Requires tax registrants to settle 30% of administrative penalties which were imposed before 28 June 2021 no later than 31 December 2021.

Where the above conditions are met, the FTA at the end of 2021, redetermine that theunsettled administrative penalties payable to be equal to 30% of such unsettled penalties. Hence, the Taxable Person shall not be required to pay the remaining 70% part.

To facilitate the procedures for registrants, FTA has linked the process on the FTA portal. Which we can see that, there is new button called "Click here to view the amendment ofadministrative penaltiesimposed as per Cabinet Decision No. 49 of 2021" on the top centre of the Dashboard.

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