UAE reduces tax fines by 70% until the end of 2021

The UAE Federal Tax Authority has called on business owners to take advantage of the reduction in tax penalties resulting from late submission of returns, the desire to close the tax file, or other fines incurred. for violating the provisions of tax laws and legislation.

The business owners explained that the reduction provided amounts to 70% of the value of the fines, stressing that the reduction decision contributed to easing the payment burden, given the market conditions left by the Corona pandemic, according to For Emirates newspaper.

This reduction comes in implementation of Cabinet Resolution No. (49) of 2021, amending some provisions of the decision regarding administrative fines imposed for violating tax laws, with the aim of supporting those registered in the system. tax to fulfill their obligations, in a manner that enhances the state’s competitiveness in the field of doing business.

The decision entered into force as of June 28, and will continue until the end of December 2021, and includes the reduction of many administrative fines imposed for violating tax laws.

Under the amendment, the mechanism for calculating 16 types of administrative fines has been reduced or modified, as the reduction includes fines for administrative offenses related to the application of the Federal Law on Tax Procedures, and the Federal Decree-Law regarding selective tax, and a federal decree-law on value-added tax.

The amendment provides more facilities to assist taxpayers in self-compliance, and encourages the acceleration of voluntary declaration.

Pursuant to the amendment, a late payment penalty will not be imposed on voluntary declarations, if payment is made within 20 business days of the date of submission of the voluntary declaration.

The faster the taxpayer declares and pays the tax according to the time periods specified in the decision, the lower the fine, which is a good opportunity for tax registrants who have errors in their returns, or Tax assessments, or tax refund requests, to expedite voluntary declaration procedures to avoid increased fines.

The Federal Tax Authority has re-set the fines imposed on the tax registrant before the effective date of the new decision in this regard, which have not been paid in full, to equal 30% of the total unpaid fines. , provided that the tax registrant pays the full tax payable up to a maximum of December 31, 2021.