A new Cabinet Resolution No. (49) of 2021 was published on 28 April 2021 amending some Provisions of Cabinet Resolution No. (40) of 2017 On Administrative Penalties imposed for violating the State’s Tax Laws.
The Effective date for implementation of this new changes is expected to be 28th Jun 2021
Key Highlights:
- The unpaid administrative penalties as on Effective date will be reduced by 70% provided the due and payable VAT and 30% of unpaid administrative penalties are paid by 31st December 2021.
- Deregistration delay penalty have reduced from a flat AED 10K to AED 1k for the first month and AED 1K for each subsequent month of delay with maximum of AED 10K.
- Delayed payment penalty has reduced significantly as detailed below:
- Initial delay penalty of 2% of VAT due amount is levied on next day
- Subsequently, it is 4% after one month unlike 4% due on 7th day previously
- Also it remains 4% per month unlike 1% per day after the first month previously
- Maximum penalty remains at 300%
- Voluntary Disclosure Fixed Penalty have been reduced from AED 3K to AED 1K (first time) and AED 5K to AED 2K (repetitive offence).
- Penalty for failure to present the price inclusive of tax reduced from AED 15K to AED 5K
- Penalty for failure to present proper Tax Invoice/Credit note reduced from AED 5K to AED 2.5K for each instance
The detailed comparison of the Cabinet Resolution No. (49) of 2021 and the earlier Cabinet Resolution No. (40) of 2017 On Administrative Penalties is enclosed herewith.
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