The companies that had no opportunity to register for VAT payment in the United Arab Emirates will not be fined until April 30
The Federal Tax Authority of the UAE (FTA) decided not to punish companies that did not register for the VAT payment for another couple of months – until April 30, 2018.
At its fourth meeting, the FTA confirmed a plan for exemption from administrative punishments for enterprises that were late with registration.
“We take into account the unavailability of some enterprises in the first phase of VAT. This decision reflects the FTA’s liability to assist enterprises and encourage them to conform with tax procedures and avoid administrative sanctions”, the representative of the FTA announced.
The failure in registration could be caused by technical, manpower or other issues.
The UAE introduced a 5 percent VAT since the beginning of this year. Initially, enterprises had to register before the end of last year. All enterprises that sell goods or services for a total amount of more than 375 thousand dirhams ($ US 102 thousand) are required to file tax returns and pay fees on time. Otherwise they face fines.
Tax regulation of the country says that the VAT refund must be received no later than 28 days after the end of the tax period.
About 260,000 companies out of an estimated 350,000 have registered for VAT in the UAE, in accordance with the information given in January, but the FTA has made a decision on prolonging time for companies and businesses for registration and abolition of fines for late registration. To help companies conform with VAT regulations, the authority prolonged the time-limits for filing tax returns.
It should be also mentioned, that the UAE Cabinet established a number of zones free of VAT when selling goods and providing services.
The full list of special economic zones was already mentioned earlier on the site in the previous articles.