"Federal Taxes" will determine the procedures necessary to implement the new provisions

Redefining fines for violators of tax laws and exemption controls

Fines equal 30% of the total unpaid amounts before June 28, 2021. Emirates Today

Yesterday, the Council of Ministers issued two decisions to redefine the administrative fines that were imposed for violating tax laws before the date of June 28, 2021 in the country, equal to 30% of the total unpaid fines on that date in the event that some conditions are met, and to determine the controls and procedures related to requests for installments, exemptions and responses in full. Or, in part, for administrative fines imposed on any person for violating the provisions of the Tax Procedures Law or tax laws.

According to the first decision, the Federal Tax Authority determines the fines imposed on the registrant before the date of June 28, 2021, which were not paid, to equal 30% of the total unpaid fines, in the event that the registrant pays the payable tax in full, up to a maximum on December 31, 2021, and pays 30% Of the total unpaid administrative fines, up to a maximum of December 31, 2021.

In the event of non-payment of tax or 30% of the total fines, the registrant can fulfill the two conditions, up to a maximum of December 31, 2022.

In accordance with the decision whose provisions came into force on January 01, 2022, the authority will determine the necessary procedures to implement these provisions, taking into account the re-definition of administrative fines imposed on the registrant with a maximum of 30 working days from the previously specified dates.

According to the second decision, which will come into force on the first of next March, the committee formed by a decision of the Chairman of the Authority’s Board of Directors approves the payment of administrative fines in installments if four conditions are met;

The first is that the request for installment is in respect of unpaid administrative fines only, and the second is that the administrative fines required to be paid in installments for a person shall not be less than 50 thousand dirhams, and the committee may make any amendment to that amount.

The third rule is that the fines are not in dispute before the Tax Dispute Resolution Committee, the competent courts, or any other bodies.

The committee may approve exemption from administrative fines, provided that the violation is not related to a crime of tax evasion, that the application be submitted within the period specified by the committee, and that the person’s request is related to one of nine cases, including:

The death of the registrant or the owner of the sole proprietorship (when the death was a direct cause of non-performance of the tax obligation). The sickness of the registrant or the owner of the sole proprietorship (when sickness prevented him from fulfilling his tax obligation). And the death, illness or resignation of an essential employee of a registered establishment (provided that it is proven that this was a direct cause of non-compliance with the tax obligation). And the presence of restrictions or procedures imposed by government authorities (when it was a direct reason for non-implementation of the tax obligation). And the existence of a general defect in the systems of the Federal Tax Authority or the payment systems or the telecommunications services used (when it causes people to fail to carry out their tax duties). And the execution of the registrar or the owner of the sole proprietorship of any of the penalties restricting freedom. The person carrying out tax duties and paying all tax amounts due from him in accordance with the tax law through another account registered for tax purposes with the Authority.If the person has been declared insolvent or bankrupt, and the tax amounts due from him have been paid before the date of the declaration of bankruptcy or insolvency, unless the purpose of the declaration is to evade the payment of administrative fines.

Refund the fines

With regard to the controls and procedures for refunding administrative fines, the decision stipulated that the committee formed by the decision of the Chairman of the Authority’s Board of Directors determine the cases and rules for refunding fines collected during the five years preceding the date of consideration of their response, in a manner that achieves tax justice and equality between legal positions for taxpayers.

The Cabinet decision also specified the procedures, documents and data necessary for submitting requests for installments of administrative fines for violating or exempting tax laws, the mechanism for studying requests for installments and exemptions, the committee’s procedures and consideration of requests, the implementation of the committee’s decisions, and the transitional provisions related to the implementation of the decision.

This step is a continuation of the package of supportive measures that the UAE government is implementing in order to facilitate violators and support the economic and tax systems by adding more flexibility in various procedural aspects.

Installment fines

Administrative fines may be paid in installments if:

■ The installment request should be in respect of unpaid administrative fines only.

The administrative fines required to be paid in installments for the person shall not be less than 50 thousand dirhams.

■ That the administrative fines required to be paid in installments shall not be in dispute before the Tax Dispute Resolution Committee or the competent courts.

■ There shall be no tax payable on the person for the tax period in question.

Exemption rules:

■ The violation for which the administrative fines arose should not be related to a crime of tax evasion.

■ The application must be submitted within the period specified by the committee.

■ That the person's request is related to one of nine cases, including death, illness, precautionary restrictions, and others.

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