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VAT Fines

Discover the penalties for failing to maintain financial and tax records, making incorrect tax payments, or filing inaccurate returns.

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VAT Fines & Penalties in UAE

Violating the provisions of UAE VAT law results in specific fines and penalties. It is essential for every taxpayer to be aware of the situations that may lead to these penalties imposed by the Federal Tax Authority (FTA).

VAT penalties in UAE are applied for non-compliance with the administrative procedures that taxable individuals must adhere to, in accordance with UAE tax laws and regulations.

Consultation and Guidelines

VAT is a widely applied consumption tax imposed on most goods and services. Recognizing the diversifying economy and the need for alternative revenue sources, the UAE government implemented Value-Added Tax (VAT). Since January 2018, VAT has been applied to nearly all goods and services in the UAE, with exceptions for healthcare, food, and education. While the VAT burden ultimately falls on the end consumer, businesses are required to implement the necessary systems, processes, and procedures to ensure compliance with this legal requirement.

Requirement of New commercial company Law No-2 of 2015

As per Article 26 of the UAE Company Law, all companies are mandated to maintain their accounting records for a minimum period of 5 years from the end of the financial year.

Under Article 348, failure to maintain proper accounting records that clearly explain the company’s transactions can result in fines ranging from AED 50,000 to AED 500,000.

Furthermore, according to Article 349, if a company fails to retain its accounting records for the required 5-year period, it faces fines between AED 20,000 and AED 200,000.

Normal requirements under VAT system

  • When purchasing goods or services, ensure that the supplier properly charges tax on taxable items and includes all necessary details on the invoice.
  • For sales or service provisions, apply the correct tax rate to the sale value, then deduct the input tax to determine the amount payable.
  • Pay the computed tax within the government's stipulated timeframe.
  • Submit VAT returns with accurate information to the government within the designated period.
  • Maintain detailed records, including invoices, stock reports, VAT returns, and accounts, to substantiate the tax paid during purchases.
All the above listed functions require more control and safety while handling stock, invoice, and other records. Accountants ensure proper filing system, upgradations of software, compliance of due dates for collection, remittance of tax, etc. Here, accountant plays a huge role in compliance of VAT as well as maintenance of accounts and records as per the company laws, etc.

How Wise Consultancy can help?

Wise Consultancy is a registered tax agent with the Federal Tax Authority and a leading provider of certified tax services in the UAE, serving a diverse range of valued clients.

VAT fines in the UAE require careful attention. If your company is facing any VAT penalties, our expert tax advisors are here to assist you in addressing these issues and working towards waiving the fines. We handle all VAT-related concerns and provide timely guidance on the latest updates in VAT rules and regulations. Our highly qualified tax professionals are well-versed in UAE tax law and the practical application of VAT.

Recognizing that each business is unique, we offer tailored solutions to meet the specific needs of our clients. Avoid VAT fines and grow your business with Wise Consultancy!

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OUR VAT SERVICES INCLUDE THE FOLLOWINGS:

VAT Solutions
VAT FAQs
VAT Returns Filing
VAT Consultants
VAT Overview
VAT De-Registration
VAT Implementation
VAT Assessment and Appeals
VAT Refund Assistance
VAT Compliance Audit

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To date we are providing Accounting Services for more than 250 clients
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