UAE announces fines for tax violations

The UAE Council of Ministers has adopted Cabinet Decision No. 39 of 2017 on Fees for Services Provided by the Federal Tax Authority and Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

The council's meeting was chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

"These decisions bring an added layer of transparency to the authority's relationship with its customers," said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance. "This, in turn, provides extra incentive for stakeholders and all concerned parties to abide by tax regulations."

"All customers can refer to the official Directory of Services Fees to know what is required of them to be in compliance with tax procedures," Sheikh Hamdan bin Rashid explained. "The directory is based on thorough studies that seek to provide the highest-quality service for the lowest cost, which resonates with the FTA's mission and vision."

Cabinet Decision No.39 of 2017 on Fees for Services Provided by the Federal Tax Authority outlines the fees to be collected for the services provided by the FTA to its clients.

Tax registration services and the issuance of an electronic tax registration certificate will be free of charge. An attested paper registration certificate, however, will carry a Dh500 fee, while registration, and renewal, fees for tax agents were set at Dh3,000 for three years.

The registration and renewal fee for an accounting software provider will be Dh10,000 for one year, whereas registering a Designated Zone will cost Dh2,000 per year. While there are no service fees associated with registering a Warehouse Keeper or issuing an electronic Warehouse Keeper registration certificate, an official printed certificate will cost Dh500.

Cabinet Resolution No.40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE applies to all violations of Federal Law No.07 of 2017 on Tax Procedures, Federal Decree-Law No. 07 of 2017 on Excise Tax, and Federal Decree-Law No.08 of 2017 on Value-Added Tax, VAT. The decision states that a fine must be no less than Dh500 and no more than triple the value of the tax on the transaction in question.

Settling a fine in accordance with this decision does not exempt the taxable person from paying the due tax in accordance with the Federal Law No.07 on tax procedures and the tax laws. The Decision does, nonetheless, give said person the right to appeal any administrative penalties they've incurred according to the procedures in the Federal Law No.07 on tax procedures.