The new regulations apply for 60 days from April 28, 2021.
The UAE has reduced sales tax and sales tax penalties to help businesses and individuals better manage the effects of the Covid-19 pandemic.
According to the newly published Cabinet Decision No. 49 of 2021, taxpayers for whom penalties are currently pending can reduce these to 30 percent, provided they pay them before December 31, 2021.
Going forward, late payment penalties will be reduced to four percent per month, which is a significant reduction of one percent per day, while the cap remains at 300 percent.
The new regulations apply for 60 days from April 28, 2021.
Thomas Vanhee, founding partner of Aurifer Middle East, said technical regulations now state that penalties for late payments should not be calculated until 20 weekdays after filing the voluntary disclosure.
He said the cabinet decision was a very important reduction in penalties and would be an excellent opportunity for taxpayers to make a fresh start.
Anurag Chaturvedi, executive director of Chartered House, said it was the best relief the government is offering to companies affected by the pandemic in the UAE.
“A number of companies in the UAE have succumbed to administrative penalties for late filing due tax. The new regime of administrative penalties is in line with global standards. The most exonerating change is the maximum fine of four percent of unpaid taxes per month compared to one percent of unpaid taxes for each day of delay according to the old regulations, “said Chaturvedi.
waheedabbas@khaleejtimes.com