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Tax Penalties for Violation of Tax The FTA claimed that by creating a tax law environment that promotes self-compliance and provides significant assistance to the national economy, the Cabinet Decision would increase the UAE's economic competitiveness in the worldwide market. The decision lists 16 different categories of administrative penalties that have either had their amounts decreased or had their calculating methods changed. Administrative infractions involving the application of Federal Law No. 7 of 2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and Federal Decree-Law No. 8 of 2017 on Value Added Tax are included in the revisions. The FTA highlighted a set of requirements that must be satisfied in order to take advantage of the redetermination of penalties in a press release issued today. First, the administrative penalty must have been imposed in accordance with Cabinet Decision No. 40 of 2017 before June 28, 2021, and it must have been fully satisfied by June 27, 2021. The FTA stated that if the registrant satisfies all of these requirements, the FTA stated that the administrative penalties will be recalculated to match 30% of the total outstanding penalties that will appear. Benefits to Registrants: To assist registrants in realizing the benefits of the new decision, the FTA provided a concrete example with two scenarios: one in which the registrant is eligible for redetermination and the other in which they are not. auditing consultancy dubai The FTA advised users to settle their outstanding balances on the FTA's e-Services portal using the "Payment Adjustment Type" option. The function enables taxpayers to distribute the funds in accordance with their preferred methods of payment. You can choose to pay tax obligations first, administrative fines first, or the oldest liability. Registrants should carefully choose these alternatives once more in order to profit from the redetermination of penalties and to get the desired payment allocation results. Registrants are strongly advised to make sure the tax return or the voluntary disclosure is submitted before making the payment. The system will settle the payable administrative penalties first if the registrant made the payment prior to filing their tax return or submitting their voluntary disclosure and they had outstanding administrative penalties in their account. This is because there was no outstanding payable tax in their account at the time of the payment. The FTA further highlighted that in order to avoid any late payment fees, taxable persons must pay their due and owing tax before the deadline. Likewise, the FTA made it clear that bank transfers can take two to three working days to process the payment; therefore, the time frame must be taken into consideration.