Federal Tax Authority approves plan to exempt businesses that are late in registering for VAT from penalties for two months
The UAE's Federal Tax Authority has approved a plan to exempt businesses that are late in registering for VAT from administrative penalties until April 30.
The deadline for registration passed on Wednesday.
At its fourth meeting, the Federal Tax Authority underlined the high levels of coordination and cooperation between the Authority, business sectors and the consumers, which led to increasing awareness on VAT and achieving positive results in the first two months since its implementation.
It added that the exemption until April 30 takes into consideration the "lack of readiness of some businesses during the first phase of VAT implementation", and reflects FTA’s commitment to assisting businesses and encouraging them to be compliant with the tax procedures and to avoid administrative penalties.
FTA chairman Sheikh Hamdan bin Rashid, also deputy ruler of Dubai and Minister of Finance, said: “The FTA is actively contributing to achieving the long-term strategic objectives of the tax system. The foremost goal is to promote economic diversification by providing sustainable sources of income for future generations to finance strategic projects such as infrastructure development and deliver more public services for citizens and residents.
“The results of the periodic follow-up show that the response levels to the tax system by the business sectors and all segments of society are very satisfactory. There is a steady increase in the tax compliance ratios, which confirms the success of the model adopted by the FTA which is based on encouraging self-compliance by businesses through easy electronic registration and electronic compliance with tax obligations according to the tax legislation designed to the highest international standards.”