VAT, an indirect tax based on transactions, is applied at various stages of the supply chain. The burden of VAT cost is usually borne by end consumers, while registered businesses play the role of tax collectors, responsible for collecting and reporting the tax on behalf of the Federal Tax Authority.
VAT is implemented in over 180 countries globally, with all OECD countries, except for the US, adopting VAT or its variations. Although it may seem similar to a general sales tax for end-consumers, VAT is a more sophisticated tax that addresses numerous challenges faced by general sales taxes.
What are the penalties in VAT?
VAT Return Penalties
Making Payment for VAT Penalties (Late VAT Return and Late VAT Payment)
If you fail to submit your VAT return or make the VAT payment on time, penalties will be applied. To check the specific penalty amounts and make the payment, access the “My Payment Tab,” where you will find the total penalty amount listed under the “VAT & Penalty Payment” box. You can refer to the online payment guide for details on completing the payment. To view the detailed information on the penalty type and amount, scroll down to the “Transaction History” box under the “My Payment” tab and check the relevant line.
Corporate Tax is a type of direct tax imposed on the overall earnings of corporations and other enterprises. In some jurisdictions, it is alternatively known as “Corporate Income Tax” or “Business Profits Tax.”
What are the penalties in Corporate Tax?
Penalties for Delayed Submission of Corporate Tax Returns
Late submission of corporate tax returns can lead to substantial fines. The penalty structure for late payment of tax liability is as follows: 2% of unpaid tax is due on the day following the due date. 4% of unpaid tax is applied monthly, starting one month after the due date.
For instance, if a business’s fiscal year ends in April and the tax return filing deadline is on the 15th day of March, failure to comply with federal decree laws or filing tax returns after the due date can result in significant financial penalties.
Penalty for Delayed Payment of Corporate Tax In the UAE
The late payment penalty for corporate tax is calculated using the following formula:
Punctual payment of corporate taxes is crucial for companies to avoid these fines and potential penalties. Complying with tax laws and promptly fulfilling tax responsibilities is essential to prevent financial difficulties and maintain a positive relationship with the tax authorities.
Currently, in the UAE, Excise Tax is levied on the following items:
The main purpose of implementing the Excise Tax is twofold: first, to curb the consumption of these goods, and second, to generate revenue for the government that can be utilized for public services. It is important for all businesses involved in importing, producing, or distributing excise goods from designated zones to be aware of their registration obligations and ensure compliance with filing and payment of the Excise Tax.
What are the penalties in excise tax ?
This article was published on 14 August 2023
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