Among the main mistakes made by taxpayers in the UAE, the following can be highlighted:
🔺 Failure to register for VAT when reaching the threshold of 375,000 AED. Even if your sales are taxed at a 0% rate, reporting is still required for such operations.
🔺 Failure to register for VAT when reaching the threshold of 375,000 AED for importing goods and services.
🔺 Failure to register for VAT and Failure to submit reports. The FTA (Federal Tax Authority) registers back-dated and imposes fines for each tax period.
🔺 Failure to consider the place of supply when determining the taxation of goods and services in the Emirates, especially relevant for electronic services.
🔺 Failure to fulfill the obligation - absence of contracts and invoices, accounting records and ledger accounts, and other primary supporting documents for business operations (minimum for the last five years).
Additionally, let's list the main reasons for which taxpayers may be fined in the UAE:
🔺 Failure to register for VAT when reaching the threshold of 375,000 AED. Even if your sales are taxed at a 0% rate, reporting is still required for such operations.
🔺 Failure to register for VAT when reaching the threshold of 375,000 AED for importing goods and services.
🔺 Failure to register for VAT and Failure to submit reports. The FTA (Federal Tax Authority) registers back-dated and imposes fines for each tax period.
🔺 Failure to consider the place of supply when determining the taxation of goods and services in the Emirates, especially relevant for electronic services.
🔺 Failure to fulfill the obligation - absence of contracts and invoices, accounting records and ledger accounts, and other primary supporting documents for business operations (minimum for the last five years).
Additionally, let's list the main reasons for which taxpayers may be fined in the UAE:
- Late submission of VAT registrant registration - 10,000 AED. This will be applied after the VAT registrant registration application is approved.
- Late submission of VAT returns (if applicable) - 1,000 AED (first time) or 2,000 AED (for repeated requests within 24 months). This will be applied after the VAT return is submitted for a past date.
- Late payment of VAT value (if VAT returns for past periods include positions for VAT payment) - 2% of the unpaid tax immediately payable + 4% of the due tax payable one month after the payment date and every month on the same day after that (up to a maximum of 300%).