Penalty Reconsideration – UAE VAT

Reconsideration is the way to approach authority if you are not satisfied with the penalty decision issued by the authority. It is a request application that can be submitted by a Registrant/Non-registrant or tax agent after preparing a proper case study that produces evidence justifying the reason.

The authority appoints a represented member to review each application if there is any additional documents/clarification required from the applicant. The appointed member will approach the applicant by communication channels i.e. email/phone.

Based on our experience, for the last 2 years we have submitted more than 100 applications, we observed and learned that if the application is properly explained and submitted with additional supporting documents(Only in Arabic). The authority is reviewing the application and providing a waiver of penalties.

Who can submit a reconsideration application?

The application can be submitted by a Registrant/ Non-registrant and Tax Agent, who are not satisfied with the authority penalty decision. The application can submit by using an online FTA portal.

When do we need to submit a reconsideration application?

As per Article-27 of Federal Law No. (7) Of 2017 on Tax Procedures, the application must be submitted within 20 business days from the applicant being notified of the decision.

How does submit an application?

The application can be submitted by using an online FTA portal. The application is only acceptable in the Arabic language.

What are the reasons where authority will not look into your application?

As per Article-26 clause (4) of Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures. There are mainly 2 reasons:-

1. Insufficiency of Funds
2. Reliance on another person

In the above two cases, the authority will not look into your application.

What are the documents required to submit the application?

There are the following documents require:-

1. Authorized Signatory Passport copy
2. Authorized signatory Emirates ID Copy
3. Authorization proof i.e. MOA/POA etc.
4. A case study letter with supporting documents

How authority will approach after submission of reconsideration?

The Authority shall review a request for reconsideration if it has fulfilled the requirements and issue. Its justified decision within 20 business days from receipt of such application. The Authority shall inform the applicant of its decision within five business days as of the issuance thereof.

What if the authority approves the application?

In the case of application is approved by the authority, the penalty amount will be reverse on applicant FTA “VAT Transaction” ledger and the applicant will receive a confirmation email from authority.

What if the authority rejects the application?

If authority is not satisfied with your request application. The applicant can approach to “Tax Disputes Resolution Committee”. 

What if the Tax Committee rejects the application?

If the Tax Committee is rejected the application. The applicant can approach the Court.

Source:https://www.gccfintax.com/articles/penalty-reconsideration-in-uae-vat-1254.asp