The Federal Tax Authority mandates that all taxable entities in the UAE must file a VAT return at the conclusion of each tax period. Failure to meet the deadline set by the authority will result in a VAT penalty of AED 1,000 for registrants who do not file their VAT returns on time. In addition, there are different types of heavy penalties levied for VAT non-compliance. As expert VAT consultants, we ensure you avoid these penalties.
In fact, Horizon Biz Consultancy also offers top-notch VAT refund services Dubai, UAE. As one of the leading VAT consultant UAE, we have a team of experienced professionals who routinely service the corporate taxpayers across various sectors in the UAE.
In the UAE, VAT penalties can be categorized into three main types: administrative penalties, percentage-based penalties and daily penalties.
These are fixed penalties imposed on businesses for specific violations, regardless of the amount of tax involved. Some examples of administrative penalties include
AED 20,000
AED 1,000 for the first offense and AED 2,000 for repeated offenses within 24 months
AED 15,000
These penalties are calculated as a percentage of the unpaid tax or the tax underpaid due to errors. Some examples include
2% of the unpaid tax due immediately
4% on the seventh day following the deadline
1% daily penalty on any amount that is still unpaid one calendar month after the deadline up to a maximum of 300%
50% of the amount understated if the error is less than 30% of the total tax due
30% if the error is between 30% and 50% of the total tax due
5% of the tax amount if the disclosure is made within one year
30% if made between one and two years
50% if made after two years
These are penalties imposed on a daily basis for ongoing violations, such as failure to cooperate during a tax audit or not providing required information to the Federal Tax Authority (FTA). The daily penalties can accumulate over time, increasing the financial burden on the non-compliant business.
The VAT refund scheme for businesses in UAE is designed to facilitate the recovery of VAT paid on expenses incurred by businesses that are not registered for VAT in the UAE. The scheme allows non-VAT registered businesses to claim a refund of VAT incurred on eligible business expenses, such as trade shows and exhibitions, import and export of goods, and other business-related expenses. The VAT refund scheme is administered by the Federal Tax Authority (FTA) and businesses can apply for a refund through the FTA online portal. The scheme is intended to support the business community in the UAE and enhance the competitiveness of the economy by encouraging foreign investment and promoting exports. Horizon can help you prepare and reclaim VAT for your business in the UAE.
Foreign businesses that are not registered in the UAE for VAT, but have incurred VAT on their eligible expenses while conducting business activities in the country, may be eligible to claim a VAT refund. To be eligible, the foreign business must meet the following criteria
At Horizon Biz Consultancy, we can help you submit a refund application to the Federal Tax Authority (FTA) as an appointed tax agent. The FTA will then review your application and supporting documents before issuing a refund, subject to your business meeting all eligibility criteria and requirements.
We provide complete support in case of VAT penalties, including the preparation and submission of appeals to reduce or waive penalties. Our focus on client satisfaction, attention to detail, and in-depth knowledge of UAE VAT laws and regulations make us a trusted partner for businesses seeking VAT-related services.
As an experienced and reliable VAT consultancy firm that offers a wide range of VAT-related services, including VAT refund and penalties services, in the UAE, our team of highly skilled and knowledgeable VAT experts is equipped to handle all aspects of VAT refund claims, including the preparation and submission of documentation to the FTA.
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Common cases eligible for VAT refunds – excess input VAT credits, errors in past returns, VAT paid for export of goods/services, business closure or cancellation of registration.
Key documents are VAT returns, tax invoices, customs documentation, proof of payment of VAT, bank account details, financial records and original tax registration certificate.
VAT refunds via bank transfer can take between 1-2 months after filing the VAT return claiming refunds, if tax authority validation is completed quickly.
Yes, our tax experts actively follow up with Federal Tax Authority using proper channels to speed up validation and disbursal.
Penalties for late registration, late payments, errors in returns, incomplete records can range from AED 1,000-50,000. Percentage-based penalties also apply.
By ensuring timely compliance, proper bookkeeping, accurate returns, invoice issuance/storage protocols in line with VAT law and tapping professional help.