- February 9, 2024
- Posted by: Shuraa Tax Consultant
- Category: VAT - Value Added Tax in UAE
The reconsideration of UAE VAT enables a taxable entity to challenge decisions made by the Federal Tax Authority (FTA). It’s imperative for all companies operating in the UAE to understand tax laws thoroughly to ensure smooth business operations. Failure to adhere to FTA tax regulations may result in VAT fines and penalties. Despite businesses diligently adhering to FTA rules, they may still face fines and penalties in certain instances. In such scenarios, taxpayers may find themselves dissatisfied with the FTA’s decision and can seek VAT Reconsideration. For further insights into UAE VAT reconsideration, refer to the Shuraa Tax guide below.
What is the VAT Reconsideration Application?
The VAT Reconsideration Application serves as a recourse for businesses dissatisfied with penalties or decisions imposed by the FTA. Introduced by the UAE government, this option addresses grievances by allowing taxable entities to contest penalties and prompt the FTA to reassess its initial decisions. This form, submitted by either the VAT registrant or their tax agent, includes substantial evidence to support the argument for revising penalties or other issues.
In what scenarios is the VAT Reconsideration Form Submitted?
Taxable individuals primarily utilise the VAT Reconsideration form to seek exemption from penalties imposed by the FTA. Various factors may lead to the imposition of VAT penalties by the FTA. The following are critical reasons for attracting VAT penalties in the UAE:
- Delay in filing VAT returns
- Delay in settling due taxes
- Late registration or deregistration for VAT
- Inadequate record-keeping
- Submission of incorrect documents/information
Additionally, the UAE VAT reconsideration form can be submitted when disputing FTA decisions concerning tax assessments, VAT rate treatment, and registration exceptions, among other matters. For further insight into legal requirements, consult with Shuraa tax consultants in Dubai, UAE.
Steps to Submit a VAT Reconsideration Application
Below are the steps to submit a VAT Reconsideration Application:
The FTA stipulates that the VAT reconsideration form must be submitted within 20 business days from the receipt of the authority’s decision.
The tax reconsideration request can be conveniently submitted online via the FTA website, simplifying the process for taxpayers.
Tax agents in Dubai emphasise that the FTA is generally prompt in responding to requests and often grants waivers on penalties if the application presents valid justifications for the VAT reconsideration.
All supporting documents and evidence accompanying the application must be in Arabic. This language requirement poses challenges for foreign taxable individuals, yet partnering with proficient tax agents in Dubai can alleviate these hurdles.
The FTA reconsideration form UAE reviews each reconsideration request to ensure compliance with all requirements. Within 20 business days of receiving the application, the authority issues its justified decision.
Applicants are promptly notified of the FTA’s decision on their request, typically within five business days following its issuance, facilitating transparency and clarity.
How to apply for UAE VAT Reconsideration?
Guidelines for Applying for UAE VAT Reconsideration:
The UAE VAT reconsideration form can be accessed directly from the FTA website, providing businesses with convenient access to the necessary documentation.
Businesses can submit their VAT reconsideration requests online, streamlining the application process and ensuring efficiency.
It’s imperative to note that all applications and supporting documents must be submitted exclusively in Arabic. The FTA strictly adheres to this requirement and will not consider any submissions in English.
To ensure the FTA’s consideration of the application, it’s crucial for businesses to adhere strictly to the language requirement and submit all documentation in Arabic as mandated.
For businesses facing language barriers, seeking assistance from professionals well-versed in Arabic and familiar with VAT regulations can facilitate the process and ensure compliance with FTA guidelines.
Required Documents for the VAT Reconsideration Form
The following documents are necessary to submit the UAE VAT reconsideration form:
- Passport copy of the authorised signatory
- Emirates ID of the authorised signatory
- Proof of Authorization (POA or MOA)
- Formal case study letter outlining the facts of the matter, supported by relevant documentation and legal references.
If you disagree with a penalty decision made by the Federal Tax Authority (FTA), you can request a reconsideration. The tax registrant, non-registrant, or tax agent can submit the VAT reconsideration form. Before submitting a VAT reconsideration, it’s essential to build a compelling case with evidence and justified reasons explaining why a penalty should not be imposed.
Steps to Take if Dissatisfied with FTA’s Review
Tax Agents in Dubai: FTA often grants penalty waivers or favourable reviews. However, applicants may still need more support. Consultation with reputable tax consultants is advised to navigate dispute resolution procedures effectively.
Tax Dispute Resolution Committee:
If dissatisfied with the FTA’s review, applicants can appeal to the tax dispute resolution committee. They assess objections within 20 days and notify the applicant within five business days. The committee’s decision is final if total dues and penalties don’t surpass AED 100,000*. Taxpayers must object to the committee before escalating disputes to the Competent Court.
Federal Court Litigation:
Taxable individuals discontented with the Tax Disputes Resolution Committee’s decision can appeal in the Competent Court. The court’s decision on tax disputes is conclusive. However, taxable persons must file the appeal with the court within 20 days following communication of the Tax Disputes Resolution Committee’s decision.
According to the Tax Procedures Law, appeals can be made to the Competent Court under the following circumstances:
- To contest the Committee’s decision in part or whole.
- If the Committee fails to issue a decision regarding the submitted objection.
Response Duration for UAE VAT Reconsideration:
Valid and comprehensive clarification requests may take up to 40 business days to respond. Incomplete requests prompt the FTA to seek additional information, which may extend the response time by another 40 business days after resubmission.
Shuraa Tax assists clients with reconsideration applications, boasting extensive expertise in navigating VAT laws relevant to regional businesses. Contact us today at +971508912062 or via email at email@example.com for prompt assistance. Let’s mitigate tax risks and optimise your tax positions together.
You can save the application in progress as a draft and revisit it later. However, if the application remains unsubmitted for 60 calendar days from initiation, it will be automatically cancelled. Notifications will be sent to your registered email or verified mobile number as reminders to complete the application.
It may take the FTA up to 45 business days from receipt to reply to your completed reconsideration application.
Yes, you can simultaneously request reconsideration and waiver for a penalty with the FTA.
Yes, you can contest a decision made by the reconsideration committee at the Tax Dispute Resolution Committee (TDRC) within the Department of Justice.