Good news tax registrants! The Federal Tax Authority (FTA) has stated on Monday 24^th January 2022, to extend the grace period for the re-determination of administrative penalties on violating tax laws until 31^st December 2022.

That is to benefit from Cabinet Decision No.49 of 2021. Those tax registrants who were not able to fulfil the conditions to benefit from re-determination before 31^st December 2021, can now fulfil the conditions before 31^st December 2022.

The UAE Cabinet’s decision stated that the amount of total unpaid penalties that were imposed before June 28, 2021, equal to 30 percent of the total unpaid penalties, provided the conditions set by the Cabinet are met. The FTA will determine the procedures for implementing the provisions related to the re-determination of administrative penalties for tax law violations. A maximum of 30 business days from the date specified in the Cabinet Decision will be allowed for redetermination of administrative penalties on tax registrants imposed by the FTA.

Such a decision has been made to provide an opportunity for the business sector to benefit from the reduction of penalties and reducing burdens on them due to the pandemic and to amplify their abilities in contributing to more growth of the national economy. This decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance.

Highlighting the eligibility of the tax registrants, it added that:

• The administrative penalty should have been imposed before June 28, 2021, and the amount due was not settled in full before that date.
• The tax registrant has settled all payable taxes by 31 December 2022.
• The tax registrant has also settled 30 percent of total unpaid administrative penalties no later than 31 December 2022.

The FTA explained that the actual penalties imposed because of the re-determination of administrative penalties are already reflected in the accounts of many eligible tax registrants who have met the conditions stipulated in Cabinet Decision No. 49 of 2021 on amending some provisions of the Cabinet Decision on Administrative Penalties for Violation of Tax Laws in the UAE, which came into effect on 28^th June 2021. For such registrants, the new values after re-determination appeared on the accounts of registrants on the FTA’s e-Services portal; registrants were also informed by emails that the re-determination process had been completed.

The Arab world’s second-biggest economy, the UAE is carrying out economic, legal, and social structural reforms aiming at strengthening its business environment and attracting foreign investment. UAE’s vat and tax amendment penalty rules change from time to time to aid businesses and motivate companies to expand their operations in the country. GITPAC Consultancy Services UAE can keep your business up to date with VAT and tax rules alterations and handle your VAT registration and VAT filing processes in the UAE.