Penalties for Companies Which Do Not Comply with Tax Procedures in Dubai

Updated on Sunday 22nd October 2017

Penalties for Companies Which Do Not Comply with Tax Procedures in Dubai Image
Authorities in the UAE have decided to give penalties to all companies which do not respect and comply with the tax legislation in the country. In this matter, depending on the tax which has not been paid, the penalty will count three times the levy. Dubai is known as a tax haven where investors worldwide can benefit from numerous advantages. For a better understanding of the taxation in the UAE and also if you want to know how we can help you with accounting services, we suggest you address to our team of accountants in Dubai.

Fines in cases of not keeping the financial records of the business

Even if the taxation system in the UAE is favorable in all domains, there are cases where companies do not provide the necessary information in accordance with the tax laws in the country. For example, there are businesses which fail to keep the compulsory financial records as stipulated by the legislation. In this matter, the financial authorities have decided to apply a penalty of AED 10,000. Furthermore, there will be an AED 50,000  for repeated offences. Starting with the 1st of October, all enterprises must comply with the new taxation system where the excise tax has been added. The companies which provide goods and services in Dubai must display the full price, and the excise tax separately. An AED 15,000 penalty will be issued for businesses which do not provide such information.

Penalties for VAT issues

Starting with January 2018, the UAE will implement the VAT of 5% rate. Once the conditions and requirements in this matter have been analyzed and settled, entrepreneurs with establishments in Dubai will have to align with the new rules, meaning that the taxable products must be placed separately from the ones which are not subject to VAT taxation. Not giving importance to this new rule will impose a penalty of AED 50,000.

In taxation matters for your company, you can rely on our Dubai accountants who can also provide audits in Dubai for your business, whether it is large or small.

The reasons for implementing penalties in the UAE

The Minister of Finance in Dubai wants complete transparency when the new taxes will be imposed in the UAE. We remind that the states part of GCC (Gulf Council Cooperation) have been deliberating whether a VAT is necessary or not, and what the benefits or consequences will be in this case. Several tax regulations have been accepted and ready to be implemented starting next year.

For a better understanding of the taxation system in Dubai,  we invite you to get in touch with our accounting firm in Dubai.