What to do if you receive a VAT penalty notice?

Receiving a VAT penalty notice can be a truly unpleasant experience. The best way to deal with a VAT penalty is not to get one in the first place, but if you've already received it, there are some things you can do to appeal them.

Do I have the right to object the penalties imposed by the Authority?

Law confers upon a person the right to object the penalties imposed by the authorities by submitting a request to authority to reconsider any of its decisions within 20 business days of being notified of the decision.

Such decision has to be passed with the reasons within 20 days from the date of receipt of application for reconsideration from the person and the authority needs to inform the decision to the applicant within 5 business days of issuing the decision.

 

What can I do if I'm not satisfied with the decision of authority?

If the person is not satisfied with the decision of the authority he has the right to apply for the consideration to “Tax Disputes Resolution Committee”

 

What can I do if I'm not satisfied with the Tax Disputes Resolution Committee?

If the Person is not satisfied with the Committee’s decision, he shall file the application with the Competent Court in the manner prescribed under Article 33 of the Tax Procedures Law.

 

What measures are to be taken if I fail to pay any payable tax or administrative penalties?

If a Taxable Person fails to settle any Payable Tax or Administrative Penalties within the specified timeframe under this Law and the Tax Law, the following measures shall be taken:

  • The Authority shall send the Taxable Person a notice to pay Payable Tax and Administrative Penalties within 20 business days of the date of Notification
  • If the Taxable Person fails to make payment after being notified pursuant to section (1) of this Article, the Director-General shall issue a decision obligating the Taxable Person to settle the Payable Tax and Administrative Penalties which shall be communicated to him within 5 business days from the issuance of the decision accompanied by the Tax Assessment and Administrative Penalties Assessments.
  • The decision of the Director-General regarding the Tax Assessment and Administrative Penalty Assessments shall be treated as an executory instrument for the purposes of enforcement through the execution judge at the Competent Court.

 

The best way to deal with a VAT penalty is to never receive one in the first place. Send us your query today and our UAE VAT Experts will make sure your business is VAT compliant and never gets a VAT penalty or a fine!

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