The Consequences of Non-compliance of VAT Laws
Amidst the speculation concerning the possible increases in prices and the cost of living when the new Value Added Tax takes effect on January 1, 2018, changes in reporting practices are also a serious concern for businesses in the United Arab Emirates.
According to Gulf News, substantial penalties will be incurred by those who do not follow the registration and reporting practices mandated by the FTA.
The penalty for failure to submit a registration application, for those required by law, will be Dh 20,000. The penalty for failure to submit tax-related data, records, or documents to the Authority when requested, will also be AED 20,000.
A first-time failure of the business entity to keep and maintain required records of the information specified will result in a fine of AED 10,000. This will increase to Dh 50,000 for repeated failure.
The penalty for the failure of those required to report circumstances that require Amendment of their information will be AED 10,000.
Any person appointed Legal Representative of a business entity is required to inform the Authority of his appointment within the specified time frame. Failure to do so will result in a penalty of AED 20,000.
The failure of that Registrant or Legal Representative to file a Tax Return in the specified time frame will result in a penalty by the Authority of Dh 1000 for the first offence and AED 2000 for repeat offences.
The complete set of regulations and penalties is far more extensive than those listed. Registration, for those required, must take place by January 1, 2018. Penalties will be levied against those who do not keep required records and mechanisms of collection and accounting in place. Ensure that your organization understands and is compliant with all of these new laws. Contact Legends Accounting today!