The Federal Tax Authority (FTA) has circulated a reminder to its tax payers on the fast approaching deadline to benefit from the Tax Penalties Amnesty made available by Cabinet Decision No. 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

Effective date

The deadline to benefit from the said Tax Penalties Amnesty is 31 December 2021. 

In brief

On 28 April 2021, the Cabinet issued Decision No. 49 of 2021 which amended the penalties regime for violations of tax laws in the UAE; this included introducing a Tax Penalties Amnesty as a concessionary measure aimed to help businesses in the UAE.

The FTA is able to redetermine the unsettled payable administrative penalties imposed on taxpayers in line with the previously enforced penalty regime, granting the taxpayer an amnesty of 70% of the applicable administrative penalties.

To benefit from the redetermination, the following conditions must be met:

  • The penalties must have been imposed on the taxpayer prior to the effective date of the new penalty regime (28 June 2021).
  • The taxpayer has not settled all the administrative penalties imposed in full before 28 June 2021.
  • The taxpayer has settled all tax payable (whether due before or after 28 June 2021) and 30% of the total unpaid administrative penalties imposed before 28 June 2021 by 31 December 2021.

 

In addition to the above Penalty Amnesty, Cabinet Decision No. 49 of 2021 introduced a number of further beneficial provisions, including reductions in penalties where taxpayers submit Voluntary Disclosures. This process is separate to the above Penalty Amnesty and is aimed at encouraging taxpayers to correct any mistakes made previously by submitting Voluntary Disclosures to obtain reduced penalties.

KPMG has a team of experienced tax specialists that can help you assess your current tax position, advise on the applicability of the Tax Penalty Amnesty to your business, prepare VAT Voluntary Disclosures and clarification requests, or represent you in front of the FTA as registered tax agents.

We are happy to discuss your specific circumstances with you and determine the way forward should you have any questions or concerns in this regard. Please get in touch with your usual KPMG contact or any of the tax professionals below.