Dubai: In a significant development, voluntary disclosures made by ═■┐═Ášż║ based businesses on their actual VAT obligations will be charged with late payment penalties, reaching up to 300 per cent of the dues.
Not just that, the penalties will apply from the due date of the tax return ÔÇô and not from the date of voluntary disclosure. This is according to a ruling by the ═■┐═Ášż║ Federal Supreme Court judgment on an appeal filed by the ═■┐═Ášż║ Federal Tax Authority.
ÔÇťBased on this judgment, taxpayers submitting voluntary disclosures could be subject to penalties of up to 356 per cent of the tax due,ÔÇŁ says an update on the ruling issued by the law firm firm Baker McKenzie Habib Al Mulla.
ÔÇťThe Federal Supreme CourtÔÇÖs judgment reverses the position that had been established over the past 18 months.ÔÇŁ
During this period, penalties imposed were limited to ═■┐═Ášż║istrative ones. But now, ÔÇťthe Federal Supreme Court takes the view that voluntary disclosures are merely amended tax returns in nature.
ÔÇťThis is a major development in the ═■┐═Ášż║ tax landscape, as the judgment may affect upcoming decisions to beissued by the various Tax Dispute Resolution Committees and Federal Courts.
ÔÇťWe expect that this judgment will have a significant impact on critical business sectors involved in transactions.ÔÇŁ