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Exemption for tax law violation penalties recognized by the tax authority

Posted on    31 May 2021
Exemption for tax law violation penalties recognized by the tax authority

It has been announced by UAE’s Federal Tax Authority (FTA)  that there would be a reduction or exception of tax penalties that have been imposed on the violation of provisions of tax legislation, in case there is an acceptable excuse for the violation of tax.

Following Cabinet Decision No. 51 of 2021 related to Executive Regulation of Federal Law on Tax Procedures an individual can place a request to the FTA to reduce or exempt them from penalties concerning the violation of tax given that they fulfil a set of conditions placed forth by the FTA.

The conditions required to excuse an individual from the violation of tax were laid down by the FTA. The individual has to have enough evidence to justify such evasion and the violation associated with the imposition of administrative penalties. The FTA has to be notified about such a claim within 40 days from the date of receiving the application for the reduction or exemption of the violations.

The FTA has made it very clear that in case the violation is deliberate the excuse would not be accepted in accordance with the amendment that came into effect on 28 April 2021. For an excuse to be accepted, the decision lies with the tripartite committee which would be formed by the Director-General of the FTA. This particular committee is formed to study the excuse for tax violation and deciding whether to accept it or decline it. Applicants to the committee would be notified of this decision within 10 business days from the date of its issuance.

For more details, refer to

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