No penalty for late payment on voluntary declarations

70% reduction in tax fines until the end of 2021

The decision includes reducing fines for violations related to the application of the federal law on tax procedures.

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Business owners said that they had received phone calls from employees of the Federal Tax Authority, inviting them to take advantage of the reduction in tax fines resulting from late submission of tax returns, or the desire to close the tax file, or other fines resulting from violating the provisions of tax laws and legislation.

Business owners added to "Emirates Today" that the reduction offered amounts to 70% of the value of the fines, stressing that the decision to reduce contributed to easing the payment burden, given the market conditions left by the "Corona" pandemic.

This reduction comes in implementation of Cabinet Resolution No. (49) of 2021, amending some provisions of the decision regarding administrative fines imposed for violating tax laws, with the aim of supporting registrants in the tax system to fulfill their obligations, thus enhancing the competitiveness of the state in the field of doing business.

The decision entered into force as of last June 28, and will continue until the end of December 2021, and includes the reduction of many administrative fines imposed for violating tax laws.

Under the amendment, the mechanism for calculating 16 types of administrative fines has been reduced or modified, as the reduction includes fines for administrative violations related to the application of the Federal Law on Tax Procedures, the Federal Decree-Law on Selective Tax, and the Federal Decree-Law on Value Added Tax.

The amendment provides more facilities to assist taxpayers in self-compliance, and encourages the acceleration of voluntary declaration.

As per the amendment, a late payment penalty will not be imposed on voluntary declarations, if payment is made within 20 working days of the date the voluntary declaration is submitted.

The faster the taxable person declares and pays the tax according to the time periods specified in the decision, the lower the fine, which constitutes a good opportunity for tax registrants who have errors in returns, tax assessments, or tax refund requests, to expedite the voluntary declaration procedures to avoid increasing fines.

Under the amendment, the "Federal Taxes" re-set the fines imposed on the tax registrant before the effective date of the new decision in this regard, which have not been paid in full, to equal 30% of the total unpaid fines, provided that the tax registrant pays the full tax payable up to a maximum in December 31, 2021.

• Amending the mechanism for calculating 16 types of administrative fines.

• «Federal Taxes» redefined the fines imposed.

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