How to Apply for VAT Reconsideration in the UAE?

October 5, 2021Dated:  | |

The Federal Tax Authority (FTA) has introduced VAT (Value Added Tax) in the UAE to ensure proper transparency of business transactions in the country. The right understanding of VAT rules and regulations is very important for any business enterprise to function as non-compliance to the VAT laws could lead to hefty penalties including dissolution of business. The penalty could be caused due to various reasons such as failing to file for VAT returns on time, lack of authentic records, or submission of wrong documents before the authority. However, in cases where the penalized establishment wants to review FTA’s decision, a penalty reconsideration request can be filed as per article (27) of the Federal Law No. (7) of 2017 within 20 working days of receiving the penalty.

The application form for the reconsideration request can be accessed through the FTA website under E- Forms or through the link: https://www.tax.gov.ae/en/e-forms/reconsideration-form. It is to be noted that both the application form and the supporting documents MUST be submitted in Arabic as the FTA will not consider any application or supporting documents submitted in English. The supporting documents required for the reconsideration application includes:

  1. Emirates ID
  2. Passport Copy
  3. VAT Certificate
  4. MOA (Memorandum of Association) or POA (Power of Attorney) as proof
  5. Amount and Date of penalty issued
  6. A formal letter specifying and explaining the reasons for reconsideration request along with supporting evidence.

FTA would respond within 40 working days from filing the request, given that all the requirements are met whilst submitting the form.

The FTA decisions are mostly favorable to the applicants unless the evidences are faulty or unsatisfactory. In such cases where the applicants are not satisfied with the FTA review, there are certain steps they could follow in order to challenge the review decision.

  1. The applicant can, as a first step submit a request before the Tax Dispute Resolution Committee (TDRC) who will examine the objection within 20 days of submitting the request. This decision will be final if the amount of VAT due and the penalties levied add up to an amount less than AED 100,000.
  2. If an applicant is unsatisfied with a decision made by the TDRC or if the committee has failed to issue a decision on time, they can file an appeal in the competent court within 20 days of notification of the decision.
  3. The decision made by the competent court is regarded as final and unchallengeable.

Right knowledge about the tax regulations and concerning procedures are very important whilst starting a business in the UAE. For the past 17 years, Flying Colour has been assisting clients in all matters related to VAT in the UAE. Please feel free to mail your queries at info@flyingcolour.com or contact us at +971 4 4542366.

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