The penalties for NOT registering for VAT are looking surprisingly high. The guidelines are being updated regularly however this is what we can conclude from the latest announcements:
In the most recent guidelines from the government the following has been highlighted:
– In the case of a business failing to keep the required records and other information specified in the tax laws, the business will be fined Dh10,000 the first time and Dh50,000 for a repeat offence.
– A failure by the businesses to display prices inclusive of VAT tax will incur a Dh15,000 fine.
– The law further states that if the person fails to submit data, records and documents related to tax in Arabic to authority when requested, he would be penalised Dh20,000.
– The fine for not registering is Dh20,000.
– If the tax payer does not pay his taxes due, after one month a daily penalty applies of one per cent.
– In case of failure of the taxable person to voluntary disclose errors in the taxable returns will also incur a fine of Dh3,000 for the first and Dh5,000 for repetition.
– Failure by the Taxable Person to issue the Tax invoice or an alternative document when making any supply. – (5,000) for each tax invoice or alternative document.
The Cabinet 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
These fines may be subject to change and are a guideline only based on the current information which has been released. New regulations are being released all the time, so keep an eye on the announcements. Advisors ME accepts no responsibility for decisions based on this information, we are simply sharing our observations of the latest announcements, to help companies further understand this complicated information.
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