Administrative penalties are fines imposed by the Federal Tax Authority (FTA) for violations of tax laws. Taxable persons must comply with all VAT obligations to avoid these penalties, which are outlined in Cabinet Decision No. (40) of 2017. The FTA notifies individuals of any penalties within five business days of a violation.
When Are Administrative Penalties Imposed?
Administrative penalties are imposed for violations listed in Tables (1), (2), and (3) of the Cabinet Decision No. (40) of 2017.
| Violation Description | Administrative Penalty (AED) |
|---|---|
| Failure to maintain required records and other information. | AED 10,000 (first time), AED 50,000 (repeated). |
| Failure to submit data, records, and documents in Arabic when requested by the FTA. | AED 20,000 |
| Failure to submit a VAT registration application on time. | AED 20,000 |
| Failure to submit a deregistration application on time. | AED 10,000 |
| Failure to update tax information with the FTA. | AED 5,000 (first time), AED 15,000 (repeated). |
| Failure of a legal representative to inform the FTA of their appointment. | AED 20,000 |
| Failure of a legal representative to submit a tax return on time. | AED 1,000 (first time), AED 2,000 (repeated within 24 months). |
| Failure to submit a tax return on time. | AED 1,000 (first time), AED 2,000 (repeated within 24 months). |
| Failure to settle the payable tax on time. | Late payment penalty: 2% immediately, 4% after 7 days, 1% daily (up to 300%). |
| Submission of incorrect tax returns. | AED 3,000 (first time), AED 5,000 (repeated). |
| Failure to voluntarily disclose errors before an audit. | AED 3,000 (first time), AED 5,000 (repeated). |
| Failure to facilitate a tax audit. | AED 20,000 |
| Failure to account for tax on imports. | 50% of unpaid or undeclared tax. |
| Violation Description | Administrative Penalty (AED) |
|---|---|
| Failure to display prices inclusive of tax. | AED 15,000 |
| Failure to comply with conditions for transferring or storing excise goods. | AED 50,000 or 50% of the tax chargeable. |
| Failure to provide price lists for excise goods. | AED 5,000 (first time), AED 20,000 (repeated). |
| Violation Description | Administrative Penalty (AED) |
|---|---|
| Failure to display prices inclusive of VAT. | AED 15,000 |
| Failure to notify the FTA of tax being applied based on margin. | AED 2,500 |
| Failure to issue a tax invoice or credit note. | AED 5,000 per invoice or document. |
| Failure to comply with procedures for electronic invoices and credit notes. | AED 5,000 per incorrect document. |
Note: Penalties cannot be less than AED 500 or exceed three times the amount of tax due.
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