How to apply for UAE VAT Reconsideration?

What is the VAT reconsideration application?

Often, even after following the FTA’s laws and regulations yet businesses have to face fines and penalties. In these cases, the taxpayer is not convinced by FTA’s decision. As a result, the taxpayer may request a VAT Reconsideration. UAE VAT penalty reconsideration is a procedure that allows a taxable person to request a review of the FTA’s decision. To conduct their company smoothly, all enterprises in the UAE must be aware of the tax rules. Those businesses that are unable to abide by the Federal Tax Authority’s (FTA) tax rules are entitled to face VAT fines and penalties.

VAT Administrative Penalties in the UAE?

There is a set of administrative penalties, which will be imposed if the regulations set by the Federal Tax Authority UAE are being violated. List of the penalty amount charged in the following cases are mentioned below – 

• Failure in displaying the prices inclusive of taxes by the taxable person/business – 15,000 AED

• Failure by the taxable person/business in notifying the authority of applying a tax on the basis of margin. – 2,500 AED

• Failed to uphold the rules and regulations governing the transfer of commodities in specified zones – The penalty shall be greater than AED 50,000 or 50% of the unpaid tax on the products as a result of the breach, whichever is higher.

• Failure in issuing tax invoice or alternative document when making any supply by the taxable person/business – AED 5,000 separately for each missing tax invoice and alternative document. 

• Failure by the taxable person/business in issuing the tax credit note or alternative document – AED 5,000 separately for each missing tax credit note and alternative document.

• Failure to follow the rules and guidelines for the issuance of electronic tax invoices and electronic tax credit notes – AED 5,000 for each incorrect document.

Under what circumstances VAT penalties in the UAE is charged?

There have to be certain reasons for which the federal tax authority UAE charges a penalty from the business or the person. Following are the circumstances that invite VAT penalties in the UAE – 

• Failure in showing the prices that include tax

• Failure in informing the FTA of the tax based on the margin charge

• Failure in following the rules and procedures for maintaining goods in the various designated zones. 

• Failure in issuing the Tax Invoice or an alternative document while making a supply. 

• Failure in issuing a Tax Credit Note or an analogous document

• Failure to follow the rules and procedures for issuing electronic Tax Invoices and electronic Tax Credits.

What is the information needed to file the VAT Reconsideration Form?  

Taxpayers primarily submit the VAT Reconsideration form to the FTA in order to receive a penalty waiver. Before submitting VAT reconsideration, a business must gather strong reasons and evidence on why a penalty should not be levied.  Following are the information that is required during filing the VAT reconsideration form – 

• VAT registration certificate. 

• Emirates ID of the person responsible for registration.

• Passport copy of the person responsible for registration.

• Registered mobile number and Memorandum of Association to verify the authenticity of the authorized person.

• Amount of the penalty.

• Date of the penalty.

• A detailed summary of the case. 

Also, note that all the information in the Reconsideration form and documents attached with the form must be in Arabic.

Apply for VAT Reconsideration in the UAE.

The VAT reconsideration form must be submitted within 40 business days of receiving the authority’s decision, according to the FTA. The application for tax reconsideration can be submitted online at the FTA website. According to tax professionals in Dubai, the FTA is often attentive to requests and is more likely to waive penalties if the application includes a good rationale for the VAT reconsideration request.

All supporting documents and proof, as well as the application, should be written in Arabic. Foreigners who are taxable persons frequently face linguistic barriers and a lack of legal expertise. But hiring the top companies for VAT services will help them to get the work done easily. 

Can any objections be raised to the FTA if penalties are imposed?

Yes, if you disagree with the Federal Tax Authority’s (FTA) judgment or if fines have been levied, you can file a UAE VAT reconsideration request with the authority to have the decision reviewed.

The initial stage for taxpayers who disagree with the Federal Tax Authority UAE is to file an ‘Application for Reconsideration.’ After that, you can file an objection with the Tax Disputes Resolution Committee (TRDC). An appeal to the federal court system is possible if the tax plus penalties reach AED100, 000. Experienced VAT consultancy services will be required to assist taxpayers.

What is FTA’s response to the VAT Reconsideration application?

The authority will review the VAT penalty reconsideration appeal and pass the decision accordingly. FTA takes 40 days to review its decision. Depending upon case to case, the authority will either waive off the penalty or will stay to their decision. The reconsideration application must have a clear subject matter for review, a citation of relevant legislation to challenge the decision, and a convincing conclusion to address the grounds for reconsideration.

VAT Reconsideration Services in UAE

Elevate Auditing and Accounting is a firm that provides VAT Consultancy Services Dubai. We are a well-positioned firm in Dubai to assist with a reconsideration application. We have successfully attained local and international experience aiding clients in this area. To submit a VAT reconsideration request to the FTA, you must have a thorough understanding of the tax rules as well as the Arabic language. Foreign businesses, on the other hand, may find this difficult, and in such instances, the support of reputable tax agents in Dubai becomes essential for taxable persons. 

Elevate Auditing is one of the Top Companies for VAT Services, with a team of highly qualified tax advisors. We assist firms in properly drafting and submitting the FTA’s reconsideration form.