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Often businesses make mistakes that end up costing them a fortune. Although big businesses can manage easily, this is especially a problem for smaller businesses. Thus, understanding the penalties a business can incur is crucial to curating a safe mechanism for them. The Federal Tax Authority (FTA) has laid clear penalties for businesses that violate their guidelines.
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If you feel that the fines imposed by the FTA are incorrect or if you have a valid reason, you can file a reconsideration. This mechanism is put in place to give businesses a fair chance of justifying. You can potentially get your penalties reduced or waived. The process is fairly simple and can be easily filed.
The penalties set by the FTA can be divided into 5 major categories for better understanding. Each category has different fines/penalties depending on the violation(s). The major categories are listed as follows:
When it comes to the administrative duties of a business, it has to ensure timely execution. If a business fails to register itself for VAT on time, it will incur a penalty of AED 20,000. Failure to de-register VAT on time results in a fine of AED 10,000. A business has to register itself for VAT if it generates an annual revenue of more than AED 375,000. Similarly, if your annual revenue falls below AED 375,000, the business must de-register itself.
Businesses have to file VAT returns quarterly. Larger businesses on the other hand may be required to file returns every month. Filing returns after the due date can result in penalties. As per the FTA guidelines, late VAT return filings can incur a penalty of AED 1000 for the first offense. However, an additional fine of AED 2000 will be charged for each subsequent violation within 24 months. Finchoice Solutions is one of the leading accounting firms in Dubai. Our accountants are trained to take care of such matters. With our help, you can avoid such penalties with ease.
Ensuring timely payments is necessary to avoid penalties. Businesses that fail to make payments on time can incur the following fines:
Having incorrect tax invoices is a violation of the guidelines set by the FTA. Businesses that are at fault incur a fine of AED 5000 for each incorrect tax invoice. You can get help from professional chartered accountants to ensure all your financial matters are in order. This is a great way of avoiding any penalties you might incur.
One of the most important things a business has to take care of is its records. They help validate your business and ensure you are compliant with the regulations. The FTA is very strict regarding improper record keeping. This is why you must maintain your records regularly and get them audited. In case you fail to maintain your records, your business can incur a fine of AED 10,000. However, in case of repeated offense, you can be liable to pay a fine of a whopping AED 50,000. Thus, always be extra careful when dealing with the business records.
Are you facing penalties and want the FTA to reconsider? The process is fairly simple. It requires the following steps which can easily be followed through:
In case you want to file a reconsideration application, it must be filed within 20 business days of receiving the penalty notice. You can easily apply by logging on to the FTA portal. The supporting data for the request must be accurate. You should always double-check the data before filling out the form. We suggest getting help from a professional tax consultant in Dubai. Finchoice Solutions is an excellent partner as we have tremendous experience in such matters. Our professionals can help you through the entire process. By keeping a keen eye on the whole process, we can ensure the best possible results in such scenarios.
While filling out the application, provide details about the penalty and valid reasons for non-compliance. You must also provide any supporting evidence to register a strong case for reconsideration.
After the application has been filed, it will be reviewed by the FTA. They will analyze the application as well as the supporting evidence. Thus, you should only include evidence that builds a strong case for reconsideration. The review process can take up to 20 business days. After the review has been made, the FTA will give their decision in writing. In case the application for reconsideration is approved, the penalties will be reduced or waived. However, if the appeal gets rejected, you will be required to pay the original penalties. Having a professional deal with such an intricate process is important. Finchoice Solutions has professionals who are experts in providing accounting services. We help businesses solve their VAT problems and also provide auditing services. You can join hands with us and save yourself from all the hassle.
If you are still not satisfied with the final decision of the FTA, you can further appeal to the Tax Disputes Resolution Committee. The appeal must be filed within 20 business days of the reconsideration decision. While going through such processes, Finchoice Solutions can provide you with the best consultation services. You can book a consultation session from our website and link with the best professionals in the industry. Furthermore, you can hire us as your accounting partners and let us take on all your worries. With us standing right next to you, you will surely have a much safer and smoother journey.
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