- UAE tax authorities have assured penalized tax-law violators that they can apply to have the penalty reduced or exempted
- To get this done, applicants must provide a proper “excuse,” bolstered by evidence
The United Arab Emirates’ Federal Tax Authority said in a statement on Wednesday, May 26, that individuals or organizations who have been penalized for violating tax laws are well within their rights to approach the authority to reduce the amount of the penalty or entirely exempt them from it.
However, it added that this can happen only if such individuals or organizationscan show a good reason for this that is acceptable to the authority. Even then, the “excuse” should have evidence that justifies its existence, it said.
Also, the FTA has to be notified of the request for reduction or exemption within 40 business days from the end of the acceptable “excuse,” in accordance with the mechanism specified by the authority, the statement explained.
And it doesn’t end there. The individual or organization “must prove that the violation has been corrected, and the application for exemption or reduction is submitted in accordance with the form specified by the FTA” for the exemption or reduction in penalty to be considered.
The authority clarified that according to Cabinet Decision No 51 of 2021 on amending the Executive Regulation of Federal Law on Tax Procedures, any person or group who is found to have violated the provisions of the law or the tax law may submit such a request to the authority to reduce or exempt from the penalties in accordance with a set of conditions.
The FTA confirmed that, according to the amendments that came into effect on April 28, an excuse shall not be considered acceptable if the act that led to the violation was deliberate.
An excuse can only be deemed acceptable based on a decision made by a tripartite committee to be formed by a decision issued by the director-general of the FTA, said the statement.
This committee is concerned with studying the excuse and accepting or rejecting it, and will issue its decision to reduce or exempt administrative penalties within 40 business days from the date of receiving the application.
Applicants shall be notified of this decision within 10 business days from the date of its issuance, said the statement.