VAT Reconsideration Services in UAE

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VAT Reconsideration Services

The Federal Tax Authority (FTA) is the regulatory body for UAE tax laws. The same authority takes charge of managing and collecting federal taxes and fines in the country. Businesses and people can benefit by understanding the tax laws of the country. Businesses and other companies must comply with the rules and regulations, especially regarding Value Added Tax (VAT). It will help business people avoid penalties and maintain good financial standing in the market. However, Federal Tax Authorities or FTA imposed penalties in some cases. There are a few situations where a taxpayer might not be satisfied with the decision of the Federal tax authority. Here, VAT reconsideration in Dubai comes into play. In these cases, people must apply for VAT reconsideration. If you are someone who is not happy with the FTA decision and wants to file UAE VAT Reconsideration, you must read this article. The article will highlight an overview of the Value Added Tax (VAT) and VAT Reconsideration Services in UAE. In addition, we will provide you with an in-depth guide to file a VAT reconsideration. 

UAE VAT - Overview

The Federal Tax Authority has issued Federal decree-law No. 8 of 2017 to implement VAT in the United Arab Emirates. The Value Added Tax (VAT) is an indirect tax levelled at each stage of the supply chain on taxable supplies. The customer or the end-user of the supply chain is subject to VAT, which is collected by the suppliers and paid to the government. For instance, a company manufactures smartphones and supplies them to wholesalers. Then, the wholesalers sell these phones to a retailer by including some amount as a profit. The retailer again adds some profits and sells them to the customers. The customer who purchases smartphones will pay VAT to the retail shop owner. Lastly, the retailer will pay the VAT to the government or FTA. The value-added tax or VAT was introduced to diversify the income source for the government.  The government further use this income for delivering public services, like education, healthcare, social services, public transportation, and more. The standard VAT  rate is 5% in the United Arab Emirates. However, the Federal tax authority has categorised a few commodities under zero-rated supply and exempt supplies. Let us take a look at the top goods or services that are exempt and zero-rated from the UAE VAT:  

Zero-rated supplies:-

  • Education services
  • Healthcare supplies
  • Precious metals such as gold and silver
  • International transportation
  • Goods shipped outside the GCC

  Exempt supplies:-

  • Residential properties
  • Undeveloped lands
  • Life insurance
  • Certain financial services
  • Public transport services

VAT Reconsideration Services in UAE - Overview

Any legal or natural person can apply for UAE VAT Reconsideration within (40) forty business days from the notification of the decision. The service is helpful for people who disagree with the decision made by the FTA regarding the application of VAT or Excise tax. The Federal Tax Authority requires the applicant to provide reasons for applying a reconsideration of its decision, like an analysis of the alternative treatment which the primary applicant considers should have been applied to its case. Once you have applied VAT Penalty Reconsideration, the Federal Tax Authority will review the request for reconsideration. If the application has fulfilled the requirements, the FTA will issue a justified decision within (40) forty Business days of receipt of such application. The decision shall be relayed to the applicant within five days from the date of issuance.   

Scenarios for submitting UAE VAT Reconsideration form

The taxpayers use the FTA reconsideration applications in the UAE to seek exemptions from penalties imposed by the Authorities. Several factors may lead to the obligation of the VAT penalties. The following are the factors for VAT penalties:  

  • Inadequate documentation or maintenance of records
  • Submission of incorrect documents or information
  • Delay in VAT returns filing
  • Delay in settling due taxes
  • Late registration or deregistration for VAT.

  When disputing the decision of the authorities regarding tax assessments, VAT treatment, registration exceptions, and much more, the taxpayer may submit the VAT reconsideration in Dubai and other parts of the UAE. Flyingcolour Tax Consultant can provide you with further insight into legal requirements.  

Documents required for UAE VAT reconsideration

Before submitting the VAT reconsideration, you should gather a few documents. The following is the list of documents for VAT Reconsideration Services in UAE:  

  • VAT-registration certificate
  • The total amount of penalty and the date it was levied
  • Passport copy and Emirates ID of the authorised signatory
  • Proof of Authorization (POA)
  • Memorandum of Association (MOA)
  • A formal letter of the case study mentioning the facts of the matter and the relevant documents, plus legal references

  Before submitting the UAE VAT Penalty Reconsideration, the taxpayer must create a compelling case with proof and a justified explanation about why the penalty should not imposed on your business. 

The process to apply for UAE VAT Reconsideration

The Federal Tax Authority is ready to review its decision and the fact that the levy of penalties on business entities. You can submit the application for the VAT Penalty Reconsideration online to the authority, appealing the authority to review the decision and reverse the penalty.   As mentioned above, you must submit the application within 40 Business days of the receipt of the penalty. In addition, any taxpayer who has received the penalty can apply for UAE VAT Reconsideration for any decision taken by the Federal Tax Authority..  

Response Duration of UAE VAT Reconsideration

The response duration for the completed and valid request might take up to 40 business days. In contrast, if your application and submitted documents are incomplete, the authority may ask you for additional details or documents.   The response duration of these requests might take an additional 40 business days after submitting additional information or documents.  

How Flyingcolour Tax Consultant can help you?

Flyingcolour Tax Consultant can provide you with excellent VAT Reconsideration Services in UAE. Our experts can help you to prepare and submit your reconsideration request to the FTA. In addition, we can help you to gather all required documents.

Moreover, we may guide you through the whole process of applying this request. To learn more about VAT Reconsideration Services in UAE, book a free consultation with one of Flyingcolour team advisors, simply call +971 50 5585305 or send WhatsApp messages to +971 4 4542366. you can also drop an email to info (at) flyingcolour (dot) com.

This article was published on 13-03-2024. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent updates or changes.

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