The FTA will conduct tax audits to ensure that taxable persons are paying tax, filing returns and keeping appropriate records.
Penalties will be imposed for non-compliance as per Cabinet Decision No. (39) of 2017 on Fees for Services Provided by the Federal Tax Authority and Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.
The penalties range from as low as Dh3,000 and go up to Dh50,000 depending on the offences committed by the entities or individuals.
Examples of actions and omissions that may give raise to penalties include:
- a person failing to register when required to do so;
- a person failing to submit a tax return or make a payment within the required period;
- a person failing to keep the records required under the issued tax legislation;
- tax evasion offences where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.
As per the new regulations, if the person fails to keep required records and other information specified in the laws will be fined Dh10,000 in the first instance and Dh50,000 in case of repetition.
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.