News: There will be no fine in the UAE for late registration of companies for VAT purposes

The FTA of the United Arab Emirates is going to refrain from applying penalties in the form of fines to companies that have not been registered for VAT payments. The Federal Tax Authority states that a fine can be avoided only by registering as a VAT payer before April 30 of this year.

On March 5, the Federal Tax Authority published a statement clarifying that, regardless of the fact of waiver of fines, any VAT must be paid on a mandatory basis.

If the taxable income of companies in the UAE during the last 12 months exceeded 375 thousand dirhams (mandatory threshold for registration), and if a company presumes that its profit will exceed the specified amount within subsequent 30 days, this company must be registered as a VAT payer.

Voluntary registration is allowed if total taxable income exceeds 187,500 dirhams or a company plans to increase profits within subsequent month.

Remember that the UAE introduced a value-added tax from January 1, 2018. The rate is 5%.