The federal tax authority is responsible for penalizing individuals and organizations when they fail to meet the tax requirements. Not every individual or organization is willing to pay the penalty amount in every situation. They usually ask for reviewing and reconsidering the penalized amount and decision from the FTA.
This reconsideration form could be filled and submitted by a tax agent or the individual themselves to the authorities. Not everyone has the knowledge of tax and accounting details; that is why it is always recommended to let a tax agent handle these matters. Individuals and business organizations must know when to and under what circumstances a reconsideration form can be submitted.
Keep scrolling the article to know more about the reconsideration form for value-added tax according to UAE law.
What is a VAT reconsideration form?
A VAT reconsideration form or a letter is a type of request submitted to the federal tax authority in UAE to request them to review their tax penalty decisions. All the businesses and individuals must know when they can submit a reconsideration form and get the decisions made by the authorities reviewed. It will help if you make sure you are submitting the form on time to get the response on time, as it takes 40 business days in UAE to get a response from FTA.
The following paragraph will improve your knowledge about when the FTA penalizes and when an individual or an organization submits a reconsideration form.
Top 6 circumstances under which a VAT reconsideration form is submitted
Every taxpayer needs to be aware of the tax laws and standards to avoid fines and penalties. Not knowing the standards and laws could result in great losses for the taxpayer as you have to pay a certain amount as a fine. Luckily, you can ask for a fine waiver and review the fine decision imposed on you, but you need to know when you can submit the form.
Following are some of the circumstances under which a reconsideration form is submitted.
Penalties for late payment
One of the common reasons for penalizing a business or individual is failing to pay the tax amount on time. If you have a justification for late payments, you can submit a reconsideration form to request a penalty waiver. Otherwise, it is best to pay the tax amount on time, and you can get the help of a tax agent to deal with these tax calculations and payments. Most businesses and individuals consult the best VAT consultancy in Dubai to avoid any inconveniences in tax matters and avoid penalties for running businesses smoothly.
Late deregistration penalties
VAT deregistration is as important as registration; a business or individual opts for deregistration under various conditions. One of the conditions is when a business does not fall under the VAT implication laws. Such fines make the taxpayer fill and submit a reconsideration form.
Missing records penalties
The law and authorities ask you to keep certain records and documents, and failing to keep these records will cause you trouble in the form of penalties. It is very important to keep your records organized and safe so that you do not have to pay any penalty or have to get into trouble with filling the reconsideration form. The records that are necessary to keep are the tax invoices and the books as stated by the law. If you fail to keep these records, then a penalty of UAE ED 10,000 for the first time and an amount of AED 50,000 for repetitive violation.
Wrong document submission penalties
Failing to keep the required documents and submitting the documents required and asked by the authorities will result in penalties. The authorities may ask you for some documents, which are as follows.
- Trade license copy
- Copy of the owner’s passport
- Incomes statement for last 12 months
- Revenue and expense after 30 days or VAT registration
Not accounting tax due on imports
Failure to pay or account for the tax that is due on imports of goods and products always results in a tax penalty. It is better to account for the tax that comes under the VAT laws to avoid such penalties. Otherwise, 50% of the undeclared tax must be submitted as a penalty, which the authorities can only review if you file a reconsideration form. Even after filling this form, there is no guarantee that you will get a waiver depending upon the situation and severity.
Penalties for late registrations
If you or your business fall under the VAT implication laws and you have not registered for VAT, then you will be penalized with an amount of 2000 AED. You will get a waiver depending upon the reason behind the late registration. If you are registering late intentionally, then the reconsideration form will not help you in any way. Make sure you are registering on time, or you can ask for the help of experts for VAT registeration on time to avoid penalties.
It is always better to avoid any penalties by following the defined VAT Reconsideration rules and laws. Otherwise, not following the rules will result in penalties and troubles for the smooth operation of your business. So, make sure you are following the laws and not violating any laws with the help of expert advice and help.