UAE VAT

Theory and Practice

VAT Introduction &

Chapter 1 Definitions
PowerPoint Creator: By: Yaser Y. Darwish, CPA
Tax Agent & Accounting Expert
 Registered
TAX AGENT TAX AGENCY
& ACCOUNTING FIRM
TAAN # 20010898

Yaser Darwish, CPA TAN # 30002544

Tax Agent
Accounting Expert
AUS Lecturer
Fit SYSTEM – Fit VAT
Mobile: +971505530242
Phone: +97143623003
Fax: +97143623004
Email: yaser.darwish@dagate.net

www.dagate.net
 Presenter: Yaser Darwish

Certified Da Gate
Tax Agent Lecturer at
Public Hmc
TAAN # AUS and at
Accountant Founder –
20010898 UoS
– USA (CPA) Since 2013

Accounting
Specialized International
Expert (MoJ &
Training Tax Companies
Abu Dhabi
and Counting Experience –
Courts)
Courses Over 25 Years
)544 ‫(قيد‬
 Goals & Objectives
The course will introduce the students to UAE VAT laws and procedures. It
is designed to provide the students with a thorough understanding of the
fundamental VAT concepts and principles of UAE tax laws and regulations.
The course will cover all VAT elements from registration to filing tax return
focusing on how to assist organizations to be tax compliant.
The Goals of the course of “UAE VAT Laws and Procedures” is to:
• Provide fundamentals of the UAE Tax Laws and
• Analyze the impact of VAT in the business functions
• Importance of Tax compliance for businesses

Upon completion of this course you will be able to:

• Identify the key

• Understand the relevant • Businesses Tax
administration and record-
aspects of the UAE VAT laws responsibilities and
keeping tasks associated
and regulations compliance requirements
with the VAT process
4
Global Application of VAT

Source: OECD,
Consumption
1969 1974 1979 1984 1989 1994 1999
2004 2009 2014 2015+ Tax Trends
2014; WNT
164 166 Research
9 18 23 31 44 89 119 137 153
Countries

5
GCC Countries VAT Coordination

The GCC group work together in designing and

implementing new public policies as a collaborative
approach which is best for the region

The UAE is part of a group of countries which

are closely connected through

“The Economic
Agreement Between “The GCC
the GCC States” Customs Union”
 GCC VAT Framework
GCC Unified Agreement VAT (UAVAT)

6 member state, GCC Framework available in public domain

Mandatory Registration Turnover threshold $100k; Voluntary Registration $50k

The Unified Gulf Cooperation
Council Value added Tax
Standard VAT Rate of 5% to be applied across all GCC Member States Framework Agreement

Resolution adopted by the GCC

Flexibility given to Member States to implement from 1 Jan 2018 or 1 Jan 2019
Supreme Council in the 36th
session held in Riyadh during the
period 9–10 December 2015 to
Exempt or Zero rate– Education, Healthcare, Real Estate, Financial Services implement VAT in all GCC
member states
Each Member State to draft its own VAT Law and Regulations within GCC framework
GCC COMMON VAT PRINCIPLES
BASIC PRINCIPLES TO BE APPLIED IN EACH COUNTRY’S VAT LAW:

VAT payable on Purchases and Recovery of Input VAT paid

Reverse Charge Mechanism for Imports and certain industry sectors

The Unified Gulf Cooperation

Council Value added Tax
VAT collected on all Standard Rated Local Sales; 0% VAT on Exports
Framework Agreement

Quarterly VAT Return Filing in general; Monthly VAT Return Filing for some Resolution adopted by the GCC
Supreme Council in the 36th
session held in Riyadh during the
period 9–10 December 2015 to
Net VAT payment (Output VAT- Input VAT) to be made periodically to Government
implement VAT in all GCC
member states
Maintain Proper Books of Accounts, Records, Tax Invoices and Supporting Documents
GCC Countries VAT Implementation Dates

‫الكويت‬ TBA
KUW

01/01/2019
‫البحرين‬

‫قطر‬

‫السعودية‬ ‫الامارات‬
01/01/2018

‫عمان‬
Why UAE Implementing VAT?
VAT is intended to help improve the
economic base of the country

Reduce dependence on Hospitals ‫المستشفيات‬

New source of oil and other
income hydrocarbons Roads ‫الطرق‬
‫مصدر دخل جديد‬ ‫تقليل الاعتماد على مشتقات‬
‫النفط‬
Schools ‫المدارس‬

Parks ‫الحدائق‬
Continue provide
high quality services
Waste ‫النفايات‬
‫تمواصلة تقديم خدمات عالية‬
‫الجودة‬
Police ‫الشرطة‬
Measures to Control Price Increases

The Government is including

rules that require businesses
to be clear about how much
VAT the consumer is paying
for each transaction

+
1.5%
Cost of living is Lifestyle and
projected to spending behavior
increase Adjustment
Timeline of VAT in UAE

F Federal Tax Authority (FTA) established and takes charge from Jan 2017
VAT was implemented in
VAT Decree Law (Law No. 8 of 2017) issued on 23 Aug 2017
the UAE with effect from
January 1 2018 and the
VAT Executive Regulation (Cabinet Decision No. 52 of 2017) issued on 26 Nov VAT Decree Law,
2017
Executive Regulation,
FTA opens its portal for VAT Registration in Sep 2017; Option for Tax Group
Cabinet Decisions and
Registration
many guides also issued
V VAT Registration Deadline 31 Dec 2017 (Later extended to 30 Apr 2018 with no on VAT by FTA which
penalty)
needs to be referred to as
VAT implemented in UAE w.e.f. 1 Jan 2018; A few Clarification Guides issued post well.
implementation
 Concept of VAT
• Value Added Tax (VAT) is an Indirect Tax, and one of the most
common types of consumption tax found around the world.

• More than 165 countries across the globe have implemented

VAT (or its equivalent, Goods and Services Tax GST), including all
29 European Union (EU) members, Canada, New Zealand,
Australia, Singapore, Malaysia, and recently in India (GST).

VAT is a multistage indirect tax levied on each transaction of the supply of goods and services
where each supplier in the supply chain is required to charge VAT if they are registered for VAT
and they are entitled to recover the VAT on the cost of goods or services that they acquire for
purposes of making taxable supplies.

The consumer generally
bears the VAT cost while
Businesses collect and
account for the tax, on
behalf of the Government
A business pays the Government the tax that it collects
from the customers while it may also receive a input tax
credit or refund from the Government on tax that it has
paid to its suppliers
What is Tax?

Tax is the means by which governments

raise revenue to pay for public services
important aspects of daily life

Direct Tax Indirect Tax

Collection Collected by government Collected for government
Method from the person on whom by an intermediary (e.g. a
it is imposed retail store) from the person

Examples Income Tax, Corporate Tax, Sales Tax, Per Unit Tax, Value
Inherit Tax, Social Security, Added Tax (VAT), Goods and
etc. Services Tax (GST)
VAT Framework in UAE
Impact of VAT on UAE economic activity

VAT is a popular fiscal tool to increase revenue because:

• VAT is efficient, cheaper to operate, relatively less subject to fraud,
and less likely to distort investment decisions than any form of direct
tax
• VAT does not create issues of disincentive to businesses
• VAT will not go against the ‘tax-free’ branding of the UAE
• VAT in UAE is a broad-based tax at one of the lowest rates in the
world (i.e. 5%)

disadvantage Advantage
Increase business costs Diversify income sources for
countries
Changes in corporate structure Improving the infrastructure of the
economy
Increase in business responsibilities Increased work efficiency
 Why VAT in UAE?
• Provide a new source of income for the Government and Local
governments to continue providing high quality public services.
• Reduce dependence on oil and other hydrocarbons as a source of
revenue
• Strengthen Fiscal Sustainability for UAE.
• Government investment and expenditures will mitigate any negative
impact of taxation.

When considering Taxation, there are two options: Direct Taxation or

Indirect Taxation
• Direct Taxes: levied on profits and incomes (e.g. corporate income tax and
personal income tax), levied on economic rents (e.g. mineral taxes or
property taxes)
• Indirect Taxes: levied on consumption (e.g. Value Added Tax or VAT and
excise tax)
Why Comply with VAT?
 Tax Laws In UAE
Tax
Procedures

Federal Tax
Authority Value
Added Tax
Federal Degree-Law No. (13) of
2016 On the Establishment of
the Federal Tax Authority

Excise Tax
Tax Laws In UAE

Cabinet Decision No. Tax

Federal Law No. (7) (36) of 2017 on the
Executive Regulation
Procedures
of 2017 on Tax
Procedures of Federal Law No.
(7) of 2017 on Tax
Procedures

Cabinet Decision No. Cabinet Resolution

(39) of 2017 on Fees No. (40) of 2017
for Services Administrative
Provided by the Penalties for
Federal Tax Violations on Tax
Authority Laws in the UAE
Tax Laws In UAE
Value
Common VAT Added Tax
Federal Decree-
Law No. (8) of Agreement of the
2017 on Value States of the Gulf
Added Tax Cooperation Council
(GCC)

Cabinet Decision No.

(52) of 2017 on the
Executive
Regulations of the
Federal Decree-Law
No (8) of 2017 on
Value Added Tax
Before We Start
VAT Three Key Elements
Business Needs to Control

VAT
Compliance
‫الالتزام الضريبى‬

Cashflow VAT Input

‫التدفق النقدى‬ ‫المدخلات‬
 Concepts
‫المفاهيم‬

VAT
3Cs
Compliance Computation
‫الالتزام‬ ‫الاحتساب‬
 Accounting Environment in UAE
Not Just the Rules that Have Changed
The Game Itself Changed

‫قبل‬ ‫بعد‬
BEFORE AFTER
1 Concepts ‫المفاهيم‬

2 Computation ‫الاحتساب‬

3 Compliance ‫الالتزام‬
1 Concepts
Understanding
what is VAT via
right channels
2 Computation
Calculate and Report
VAT and its impact on
business Financial
Statements
Compliance
Business to continuously
comply with VAT
regulations and laws
What is VAT?
 VAT charged at each stage in the supply of goods and services

Value VAT registered business that makes business use of the supply
Added Tax could reclaima VAT input (conditions apply)
is a
consumption
VAT is ultimately borne by the final consumer
tax and is
applicable on
business Tax Collected by the registered person for and on behalf of
transactions the Government
and imports
Due VAT is calculated after adjusting deductible input tax credit, at time of
filing V A T Return

29 information. Executive Workshop on UAE VAT Implementation

© CERT Proprietary
What is VAT?

Value-Added Tax
(VAT)
It is a consumption tax
on goods or services
imposed at the point of
sale by companies
registered in the value-
added tax in UAE
 VAT Attributes

VAT is levied on VAT input claim

VAT includes the
different stages of VAT encourages on capital
production, and the principle of self-
exports because investment in
advantage is that tax censorship
this tax is usually this spending on
revenue is among registrars
guaranteed (during not imposed on goods is not
and prevents tax
all production exports considered
processes) evasion
consumption
Concept of VAT – Illustration 1
VAT is charged at each step of the ‘Supply Chain’
5% Stage 1 Stage 2 Stage 3 Stage 4
VAT Farmer grows Textile maker Clothes maker Clothing retailer
cotton and sells it makes fabric sews a shirt and prices and sells
to textile maker and sells to sells it to a the shirt for
for cloths make for retailer for
Who Pays?
When the customr
AED AED AED AED buys the shirt, the
Sale Price 10.00 50.00 100.00 200.00 AED 10 VAT is
added to the final
VAT Collected by
0.50 2.50 5.00 10.00 price AED 210,
Seller effectively making
the customer pay
Total Payment 10.50 52.50 105.00 210.00
the full cost of the
Credit From 5% VAT
Previous Stage 0.00 0.50 2.50 5.00

Net VAT Payable 0.50 on 2.00

Focus Sales &2.50 5.00
Purchases 10.00
Concept of VAT – Illustration 2

The illustration is
based on 5% VAT
rate

The multistage
nature of VAT is
well
demonstrated in
this illustration
where at each
stage tax is
levied on the
consideration and
input tax credit on
purchases can be
recovered
Concept of VAT – Illustration 3
 Laws and
Definitions
 Tax Laws In UAE
• Cabinet Decision No. (56) of 2017 on Medications and Medical
Equipment Subject to Tax at Zero Rate
• Designated Zones for the purposes of the Federal Decree-Law No.
Value
(8) of 2017 on Value Added Tax
• List of Charities That May Recover Input Tax
Added Tax
• Cabinet Decision No. (25) of 2018 on the Mechanism of Applying
Value Added Tax on Gold and Diamonds between Registrants in the
State
• Cabinet Decision No. (26) of 2018 on the Refund of Value Added Tax
Paid on Services Provided in Exhibitions and Conferences
• Decision No. (3) of 2018 on Tax Invoices
• Cabinet Decision No. (41) of 2018 On Introducing the Tax Refunds
for Tourist Scheme
• Federal Tax Authority Decision No. (1) of 2018 On the Requirements
for Retailers to Participate in the Value Added Tax Refunds for Tourist
Scheme
• Federal Tax Authority Decision No. (2) of 2018 On Tax Refunds for
Tourists Scheme
Tax Laws In UAE
Excise
• Federal Decree-Law No. (7) of 2017 on Excise Tax
• Common Excise Tax Agreement of the States of the Gulf
Tax
Cooperation Council (GCC)
• Cabinet Decision No. (37) of 2017 on the Executive Regulation
of The Federal Decree-Law No (7) of 2017 on Excise Tax
• Cabinet Decision No. (38) of 2017 on Excise Goods, Excise Tax
Rates and the Method of Calculating the Excise Price
• Cabinet Decision No. (42) of 2018 On Marking Tobacco and
Tobacco Products
• Federal Tax Authority Decision No. (3) of 2018 on
Implementing the Marking Tobacco and Tobacco Products
Scheme
UAE Legislation

• it definitions, FTA powers and the

VAT Law general principles of VAT which is
originates from the GCC agreement.

• provide the principles set out in the VAT

Regulations Law.

Tax • forms the general rules of compliance,

record keeping, FTA audit and the
Procedures taxpayer rights and obligations.
 Important Definitions
State: United Arab Emirates

Value Added Tax: a tax imposed on the import and supply of Goods and Services at each stage of
production and distribution, including the Deemed Supply.
Person: a natural or legal person.
Taxable Person: a Person who is subject to Tax under the provisions of the relevant Tax Law.
Taxpayer: any Person who is obligated to pay Tax in the State under the Tax Law whether a
Taxable Person or an end consumer.
Tax Registration: a procedure by which a Taxable Person or his Legal Representative registers for Tax
purposes with the Authority.
Tax Registration No.
(TRN): a unique number issued by the Authority for each Person registered for Tax purposes.

Business: any activity conducted regularly, on an ongoing basis and independently by any Person,
in any location, such as industrial, commercial, agricultural, professional, service or
excavation activities or anything related to the use of tangible or intangible properties.
Exempt Supply: A supply of Goods or Services for Consideration while conducting Business in the State,
where no Tax is due and no Input Tax may be recovered, except according to the
provisions of this Decree-Law.
 Important Definitions

Taxable Supply: A supply of Goods or Services for a Consideration by a Person conducting Business in
the State, and does not include Exempt Supply.
Deemed Supply: Anything considered as a supply and treated as a Taxable Supply according to the
instances stipulated in this Decree-Law. (Deemed Supply is a transaction or event on
which you have to pay output tax, even if you haven't actually sold any goods or services.
The transaction or event is regarded as a taxable supply).
Input Tax: Tax paid by a Person or due from him when Goods or Services are supplied to him, or
when conducting an Import.
Output Tax: Tax charged on a Taxable Supply and any supply considered to be a Taxable Supply.
Recoverable Tax: Amounts that were paid and can be repaid by the Authority to the Taxpayer pursuant to
the provisions of the Decree-Law.
Due Tax: Tax that is calculated and charged pursuant to the Decree-Law.
Payable Tax: Tax that is due for payment to the Authority.
Tax Period: The specified timeframe, for which Payable Tax shall be calculated and paid.
Tax Invoice: A written or electronic document in which the occurrence of a Taxable Supply is recorded
with details pertaining to it.
VAT Scope
To apply VAT on any transaction,
ALL the following conditions are met

1 Supply of Goods and Services

2 The Goods and Services are Taxable

3 In UAE

4 By a Taxable Person

5 Via Economic Activity

 VAT Scope

A transaction is within the scope of UAE VAT if all the following

conditions are met.
• It is a supply of goods or services according to the definition provided in the
VAT Law.
• It takes place in the UAE
• It is made by a taxable person*.
• It is made in the course a business carried on by that taxable person.

The transactions that do not meet all of

the above are treated as Out of Scope.
* A taxable person is an individual, firm or company, etc. which is registered for
VAT or which is required to register for UAE VAT.
VAT Keys

VAT Concepts

Value Time Place

of Supply of Supply of Supply
Important Definitions

Place of Supplies – Supply made within UAE

Time of Supplies – VAT must be accounted

for in period which supplies occur

Value of Supply – amount of consideration

given if monetary exchange; if not,
monetary equivalent (special rules apply)
 Time of Supply (Tax Point)

Goods – Which ever takes place first

• When title in the goods passes Continuous Services Supply
• Goods are imported – Which ever takes place first
• made available to recipient • Each time a payment is made
• accepted by the recipient • Payment dates specified on
• Involve Assembly/installation, invoice issued At least once
when completed every 12 months
• Invoice issued Services – Which ever
• Payment received takes place first
• Services performed
• Payment received
• Tax Invoice issued
 Value of Supply
Is the amount that a seller collects for the supply of goods or services.
It includes any expenses and charges that the supplier passes on to the
buyer, such as shipping and handling charges plus customs.

The consideration for the supply Consideration = Value of supply + VAT

can be monetary, non-monetary
or a combination of both.
• If the total or a part of the
consideration is not monetary,
the value of supply will be
calculated based on
the monetary portion plus the
fair market value of the non-
monetary portion, excluding the
VAT.
What factors reduce the value of supply?
The following factors can reduce the value of
supply:
• Discounts and deductions given to the
customer.
• Subsidies granted by other GCC states to the
supplier.
Note: If the value of supply is expressed in a
foreign currency, it will be converted into
AED, or the currency of the relevant GCC
Country, based upon the current exchange rate
on the date of supply.
Value of Supply
What factors reduce the value of supply?
The following factors can reduce the value of supply:
• Discounts and deductions given to the customer.
• Subsidies granted by other GCC states to the supplier.

Note: If the value of supply is expressed in a foreign

currency, it will be converted into AED, or the currency
of the relevant GCC Country, based upon the
current exchange rate on the date of supply.
 VAT Concept Input & Output

VAT Payable = Output VAT – Input VAT

Concepts
Output VAT Input VAT
Source Sales/Revenue Purchases/Expenses

Method Received from Paid to Suppliers/Vendors

Customers/Clients

Registered Yes – Collect & Offset Yes – Pay & Offset*

No –Can’t Collect No – Pay & can’t Offset

* Conditions apply
 VAT Concept Input & Output
Note: VAT input tax refund can be claimed only on the
amount paid or intended to be paid before the
expiration of 6 months after the agreed date for the
payment of the supply.

@Purchase @Sale

Input Output
(VAT Payment) VAT (VAT Collection)

Account
VAT Payable = Output VAT – Input VAT
Basic VAT Process

Output tax
VAT collected from customers

Less

VAT paid on business purchase input tax

Equals

Net VAT

Output tax > Output tax <

Input tax Input tax

Payable to Government Refundable from Government

Output Tax

In exception cases, the UAE tax laws

makes requirements where output tax
may apply. For example, business gifts
above a certain value and private use
of goods and services originally
bought for business purposes but
subsequently used to private
purposes.
Input Tax

Input tax can be claimed on supplies received in the course of an economic activity. This include:

• imports from outside the GCC countries

• acquisition of goods from another GCC Country on condition that the input tax
relates to taxable supplies, including zero rated supplies.

There are limits within which input tax can be claimed such as:

• VAT recovery on goods and services bought before registration

• VAT recovery on goods held at deregistration
• VAT recovery on goods and services which are not used for business
purposes (e.g. for private use), such as business entertainment
 Input Tax
Where input tax has been claimed
but the consideration for the
supply is not paid within a period
established by tax regulations, the
input tax must be paid back to
FTA.
In exceptional cases, input VAT
can not be claimed such as
• entertainment
• vehicles used for private purpose
• input tax that is not fully relating to
taxable supplies made by the tax
person.
‫‪VAT Rates‬‬

‫‪VAT‬‬ ‫‪VAT‬‬
‫‪Exempted‬‬ ‫‪Out of‬‬
‫‪Scope‬‬
‫النسبة الأساسية ‪5%‬‬ ‫النسبة ‪0%‬‬ ‫المعفى من الضريبة‬ ‫خارج نطاق الضريبى‬
VAT Rates
‫النسبة الأساسية‬ ‫النسبة صفر‬ ‫المعفى‬ ‫خارج النطاق‬

5% Out of
0% Exempt
Scope

Standard
Zero Rate Exempt Out of Scope
Rate
Rate 5% 0% No VAT Outside

Charging VAT

Reclaim Input

Tax Return

Example Most goods and Health care, Local passenger Supply of goods to other
transport, Residential, GCC, Payroll, statutory
services education, etc charges, Intra-VAT group
some specific financial
reg. Sales of going concern
services etc. business, vouchers sales at
value
Exempt Supplies

Exempt supplies of goods and services on which

• VAT is not chargeable and
• Input VAT non-recoverable.
Exempt supplies are financial services, residential buildings, bare land and
local transport services.

When a taxable person makes both taxable supplies and exempt supplies,
then the taxable supplies is partially exempt.

All input tax directly relates to taxable supplies can be reclaimed

but input tax directly relates to exempt supplies can not be
reclaimed.

Special conditions to calculate how much input tax can be reclaimed

on general overheads that is apply to taxable and taxable supplies.
Registration
Mandatory Registration:
any person exceeding the annual VAT registration threshold of AED
375,000 at the end of any month is required to register for VAT under
the following two cases, the person must apply for registration within 30
days of meeting the threshold.

• The threshold should be monitored monthly for 12 months ending

at the end of that month; and
• when a person reaches the VAT registration threshold in the next 30
days

Note: if a person only provides zero-rated supplies, the

tax laws allow the person not to be exempted from VAT
registration but should first obtain FTA approval.
Registration

The VAT Law allows registration of related persons to form a

VAT Group.

Non-residents are required to register for VAT as soon as they

make taxable supplies there is no registration threshold for
them. The obligation to register for Non-residents only applies if
no other Person is responsible in the State to account for VAT.

A person who is registered for VAT ceases to be liable to be registered

and can apply to be deregistered if the VAT-exclusive value of his
supplies will not exceed the minimum limit for voluntary registration.
Imports
Import includes of goods and services are taxable; they are supplies that
would have been taxable if bought in UAE.

• VAT is accounted for at entry on imports of goods into the UAE.

• VAT is accounted for imported services
When certain conditions are met, a reverse charge mechanism applies.

To claim VAT, the importer is required to keep evidence of the value of

the import and other customs documents.

VAT cannot be claimed by a private individual or unregistered business

and must be paid to FTA.
Exports

• Out of Scope: The supply of goods to

another GCC country (conditions

GOODS apply)
• Zero-rated: The supply of goods to
other countries other than GCC
countries.

• Services are zero-rated when provided

to a recipient outside the GCC,

SERVICES (conditions apply).

• Exports can be either direct or indirect
who arrange the delivery (the recipient
or the supplier).
 Transactions with Other GCC Countries

The VAT Law makes provisions for Supplies made to another GCC Country.

Goods
➢is Out of Scope of VAT law if the supply of goods is made to a VAT registered
customer in the other GCC country.
Services
➢are treated as taking place at the place where the recipient is resident in another
GCC Country, provided the recipient is registered for VAT in its GCC Country.

Note: Among other information, VAT registration

number of the recipient is required on the invoice to
show that the supplies are made to a business recipient
in a GCC Country.
Invoices
The Regulations set up the details of a
valid tax invoice and
• allow issuance of a simplified
VAT invoice where the recipient is
not registered for VAT or where the
recipient is registered but the
consideration for the supply does
not exceed AED 10,000.
VAT Returns
A taxable person must:
• provide a VAT return to FTA
electronically, 28 days after the end
of a tax period.
• The tax period is three months
ending on the month as a
requested registrant or on a month
allocated by FTA.

A VAT return is an electronic form of all supplies

made and received by a registered taxable person
in the tax period (usually quarterly).
Records
• Taxable person records must be
kept for at least 5 years
• Except real estate transactions
records must be kept for 15 years.
Bad Debts
The write off bad debt on output tax
paid on a supply for which consideration
has not been received (fully or partially)
after 6 months from the date of supply.
Certain conditions must meet in order
for the taxable person reclaim back the
paid VAT output.
Assessments
Assessments can be raised on tax and penalties by the
FTA for specific omissions, errors and non-compliance
An assessment must be notified by FTA to taxable
person within 5 days from the decision being made.

Fines and Penalties

Penalties can be imposed
• VAT non-payment
• VAT evasion
• Non-compliance with VAT laws and regulations
• Failing to provide information or access to
information to FTA.
• The competent court can impose penalties for tax
evasion.
 Appeals
FTA decisions can be appealed within a 20 business
days from the notification of the decision made by FTA.

• Tax Dispute Resolution Committee

• FTA decision can be appealed to a Tax Dispute
Resolution Committee. Tax penalties below AED
100,000 are final and cannot be appealed further.
Note: All due taxes and penalties should be paid
first before bring the appeal to the committee.

• Competent Court
• After the committee decision and the tax dispute
exceeds AED 100,000 (in tax and penalties), the
decision can be appealed to a competent court.
 Source of Material
- Tax Laws as issued by Federal Tax Authority website (https://www.tax.gov.ae/legislation.aspx)
- Federal Law No. (7) of 2017 on Tax Procedures
- Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax
Procedures
- Federal Decree-Law No. (8) of 2017 on Value Added Tax
- Common VAT Agreement of the States of the Gulf Cooperation Council (GCC)
- Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on
Value Added Tax
- Other Laws and Regulations

- Tax Guides and Forms as issued by Federal Tax Authority website (https://www.tax.gov.ae/help_guides.aspx)
- Public Clarification as issued by Federal Tax Authority website (https://www.tax.gov.ae/public-clarification.aspx)
- Awareness session material as issued by Federal Tax Authority website
(https://www.tax.gov.ae/awareness_session_material.aspx)
- VAT Filing Returns as issued by Federal Tax Authority website https://www.tax.gov.ae/vat-filing-returns.aspx)
- Quick References as issued by Federal Tax Authority website (https://www.tax.gov.ae/quick-references.aspx)
- e-learning as issued by Federal Tax Authority website (https://www.tax.gov.ae/e-learning.aspx)

- Da Gate Hmc Developed Training Material 6

7
End