FTA: Tax registrant can pay only 30% of their total unpaid penalties

The Federal Tax Authority (FTA) asserted that eligible tax registrants can benefit from the decision of administrative penalties re-determination, reducing their total amount due to be equal to 30% of their total unpaid penalties.

Eligible tax registrants can benefit from the re-determination, provided they complete the procedures required by the FTA through its e-services portal no later than December 31, 2021.

In a press statement issued today, the Authority outlined that after December 31, 2021, a registrant who were delt administrative penalties before June 28, 2021, will not be able to avail the re-determination and will be required to pay the full penalties due. 

The Authority also urged eligible registrants who were subject to administrative penalties issued before June 28 to benefit from paying only 30% of their total unpaid penalties, as per Cabinet Decision No. 49 of 2021 on Amending the Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE. The Decision went into effect on June 28, 2021, and included re-determination in administrative penalties to help taxpayers meet their obligations.

The Federal Tax Authority clarified that the new Decision outlined three conditions that need to be met in order to benefit from the re-determination of administrative penalties imposed before June 28, 2021. First, the administrative penalty must be imposed under Cabinet Decision No. 40 of 2017 before June 28, 2021, and remain outstanding. Second, the tax registrant needs to have settled all due Payable Tax by December 31, 2021. And third, the tax registrant must have paid 30% of the total unsettled administrative penalties due until June 28, 2021, no later than December 31, 2021.

The Authority indicated that should the registrant meet all conditions, the new value of the penalties will be equal to 30% of the total unpaid penalties that will appear in the Authority’s electronic system in 2022.

His Excellency Khalid Ali Al Bustani, FTA Director General, asserted the Authority’s commitment to making sure that registrants benefit from the facilities, which are in line with the UAE leadership’s vision to support business sectors and implement a dynamic tax system that can drive further growth in the national economy, ensure transparency, and maintain economic momentum through a legislative tax environment that encourages self-compliance, and keeps pace with developments by continuously issuing decisions that meet the requirements of each period.

His Excellency noted that as part of its continuous efforts to raise awareness, the Federal Tax Authority issued two detailed clarifications about the new Decision, which are available on the “Public Clarifications” service on the Authority’s website ( https://www.tax.gov.ae/en ). “Public Clarifications” support taxpayers to know where they stand in terms of tax requirements and to help them meet their tax obligations.

The Authority clarified that registrants are encouraged to use the “Payment Adjustment Type” feature when settling their dues on the FTA’s e-services portal in order to start implementing the new procedures.

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The Federal Tax Authority was established by Federal Decree-Law No. (13) of 2016 to help diversify the national economy and increase non-oil revenues in the UAE through the management and collection of federal taxes based on international best practices and standards, as well as to provide all means of support to enable taxpayers to comply with the tax laws and procedures. Since its inception in 2017, the FTA has been committed to cooperating with the competent authorities to establish a comprehensive and balanced system to make the UAE one of the first countries in the world to implement a fully electronic tax system that encourages voluntary compliance, with simple procedures based on the highest standards of transparency and accuracy – beginning from registration, to the submission of tax returns, to the payment of due taxes through the Authority’s website: www.tax.gov.ae.