VAT Penalty for late payment | FTA | UAE | Taxation | Tax Return | Dubai | Abu Dhabi | Liability

In this video, we will discuss the penalty for late payment of VAT by the FTA in UAE.
Here you will learn -
1) When the VAT return must be filed and paid
2) How to calculate the penalty will be if there is a delay in payment
It is essential to make sure that you pay your VAT liability on time. However, there are situations, when your business might not be able to settle this liability on time. If this is the case then the business must know what is the implication of this, and at what rate the penalty will increase, as the delay increases.
As per the UAE VAT law, every VAT registered person has to mandatorily file their quarterly/ monthly return (as the case may be) and make the payment by the 28th day of the month following the return period, unless the 28th day falls on a Friday, Saturday or a National holiday, where it will be pushed to the next working day. The VAT liability needs to be fulfilled (VAT payment to Federal Tax Authority) by the 28th, which means the VAT amount should reach the FTA by the 28th.
The Registrant shall incur a late payment penalty as follows:
• 2% of the unpaid tax is due immediately once the payment is late.
• 4% of the amount of tax which is still unpaid is due on the seventh day following the deadline for payment.
• 1% daily penalty will be charged on any amount that is still unpaid one calendar month after the deadline for payment, up to a maximum of 300%.
For example, your VAT liability for your tax period is AED 10,000, and the business were not able to make the payment for 1 year the additional penalty for this tax payment is AED 30,000. A point to note is that the FTA allows for partial payment, therefore if the business was able to make a payment of AED 4,000 before the deadline. Then the VAT liability reduces to AED 6,000 and the penalty will be calculated on the new liability and can reach up to AED 18,000.
#vatexplained #business #msiauditors #FTA #penalty
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We are one of the oldest audit firm based out of UAE, with over 30 years' experience. We are experts in Audit, Accounting, Taxation & Consultancy related services. Get in touch with us for more professional advice on your company's VAT compliance requirements in UAE.
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[@harekrishnayoutube3466]

Thank you so much indeed for your time and efforts in posting this video brother

[@MSIAuditors]

Thank you so much

[@kansarabhavin]

Great Job Dear

[@MSIAuditors]

Thank you for the positive comment.

[@harekrishnayoutube3466]

It's interesting

[@MSIAuditors]

Thank you for leaving us a positive comment. -MSI Team

[@Krishnamrit]

What is the last date to file firm tax for financial year 2022-2023 (31 march 2023)

[@-ghreyzie-5824]

If the company is waiting for the VAT registration approval and did not charge VAT until VAT application was approved, can we still claim the input VAT from the periods when VAT registration is still in process?

[@MSIAuditors]

Yes, this is allowed as long as they are eligible expenses to be claimed.

[@muhammadidrees8466]

Sir we renew our trade license two times but we didn,t update in fta portal.because we didn,t received any email from fta.what we will do now

[@MSIAuditors]

Thank you for reaching out. If there were no major changes in the license, you can make the changes to your registration through the online FTA portal. - MSI Team

[@muhammadidrees8466]

@@MSIAuditors thanks u sir.one more question that our office is in abu dhabi.when we invoicing to customer Dubai Company(i.e we providing machines on rent) during vat filing time we will put that amount in dubai emirate or abu dhabi

[@samjosephc1458]

Sir actually we are working in a boarder clearing firm.so tax is excempted we have only return of 25 AED. The problem is we filed vat on 29th actually filing date was on 28th is there any problem.

[@MSIAuditors]

If there is a delay in the filing, there will surely be a penalty. -MSI team

[@samjosephc1458]

@@MSIAuditors ok i got 2000 fine. But i called fta and applied application for reconsideration. Any chance for cancelling fine.

[@MSIAuditors]

@@samjosephc1458 The likelihood for a late payment to be waived is low. However there a possibility you will qualify for the 70% waiver of penalties.

[@usamamalik1806]

In case of VAT 1000 fine. What we can do ?

[@MSIAuditors]

You may apply for a reconsideration.