UAE’s FTA launches new ‘tax clinic’ to address SME concerns related to VAT

The UAE’s Federal Tax Authority (FTA) has officially its ‘tax clinic’ initiative in a bid to provide some support and clarity to businesses regarding value added tax (VAT) in the country.

The campaign, spread over three months, will cover all the seven emirates to raise tax awareness across the country, urging taxable businesses to register with the authority, and promoting compliance including the timely payment of taxes.

It is being organised as a collaboration between the FTA and the departments of economic development and municipalities in all emirates.

Phase one began in Ras Al Khaimah on Sunday and will continue until August 14, running from 7.30am to 2.30pm at the headquarters of Ras Al Khaimah’s Department of Economic Development (RAK-DED) and Ras Al Khaimah Economic Zone (RAKEZ).

Two teams of analysts and specialists from the FTA will hold several meetings and an interactive seminar in each individual emirate with taxable businesses that have not yet registered in the tax system or that have fallen behind on submitting their tax returns and settling their due taxes.

The campaign will particularly target small and medium enterprises (SMEs), a statement said.

The team of specialists will also resolve any technical issues companies may have faced while using the FTA’s digital portals.

The FTA said that the meetings will also be broadcast live via social media channels.

VAT, charged at a rate of 5 per cent, came into force in the UAE on January 1 and applies to most goods and services.

The administrative penalty for late registration is Dhs20,000 ($5,445). Other fines include Dhs15,000 ($4,084) for failing to display prices inclusive of VAT, Dhs3,000 ($817) for a first incorrect tax filing and Dhs5,000 ($1,361) for incorrect filings thereafter.

Failure to submit a deregistration application will result in a fine of Dhs10,000 ($2,723). A first time tax offence will result in a Dhs1,000 ($272) fine and repeat offences within two years Dhs2,000 ($545).