Cabinet Decision No. 75 of 2023

#Article 1 Definitions

Definitions in Federal Decree-Law No. (28) of 2022 on Tax Procedures and in Federal Decree-Law (47) of 2022 on the Taxation of Corporations and Businesses shall apply to this Decision, otherwise, the following words and expressions shall have the meanings assigned against each, unless the context otherwise requires:

Tax

Corporate Tax.

Tax Procedures Law

Federal Decree-Law No. (28) of 2022 on Tax Procedures.

Corporate Tax Law

Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses.

Due Tax

Tax that is calculated and imposed under the provisions of the Corporate Tax Law.

Administrative Penalties

Monetary amounts imposed upon the Person by the Authority for breaching the provisions of the Tax Procedures Law, the Corporate Tax Law or decisions issued by the Cabinet for execution thereof.

Tax Audit

A procedure undertaken by the Authority to inspect the commercial records, information, data or goods related to a Person to determine whether the Person has fulfilled his obligations under the Tax Procedures Law or the Corporate Tax Law.

Declaration

A declaration made pursuant to Clauses (5) and (6) of Article (53) or Clause (1) of Article (55) of the Corporate Tax Law.

Tax Difference

The difference between the Due Tax as calculated and the Due Tax as it should have been calculated.

#Article 2 Scope of Application

Notwithstanding the provisions of Cabinet Decision No. (40) of 2017 referred to above, the Administrative Penalties included in the schedule annexed to this Decision shall apply to violations related to the application of the Corporate Tax Law.

#Article 3 Date of Application of Monthly Administrative Penalties

For the purposes of Clauses (3), (6), (7), (8), and (13) of the table annexed to this Decision, if any penalty is to be imposed on the same date monthly, the date for a month that does not have a corresponding date for that date, shall be considered the last day of the that month, however, the penalty for all other months shall be imposed on the same date the monthly penalty was first imposed.

#Article 4 Publication and Entry into Force

This Decision shall be published in the Official Gazette and shall come into effect on 1 August 2023.

Mohammed bin Rashid Al Maktoum

Prime Minister

Issued by us,

On: 22/ Dhu Al Hijjah / 1444H

Corresponding to: 10/ July/ 2023 AD Table of Violations and Administrative Penalties Annexed to Cabinet Decision No. (75) of 2023 on Violations Related to the Application of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses

No. Description of Violation Administrative Penalty Amount in AED

1.Failure of the Person conducting a Business or Business One of the following penalties shall apply: Activity or having a Tax obligation under the Tax Procedures Law or the Corporate Tax Law to keep the 1. 10,000 for each violation. required records and other information specified in the 2. 20,000 in each case of repeated violation within Tax Procedures Law and the Corporate Tax Law. 24 months from the date of the last violation.

2.Failure of the Person conducting Business or Business 5,000 Activity or having a Tax obligation under the Tax Procedures Law or the Corporate Tax Law to submit the data, records and documents related to Tax in Arabic to the Authority when requested.

3.Failure of the Registrant to submit a deregistration 1,000 in case of late submission of the application application within the timeframe specified in the and on the same date monthly, up to a maximum Corporate Tax Law and its implementing decisions. of 10,000.

4.Failure of the Registrant to inform the Authority of any One of the following penalties shall apply: case that may require the amendment of the information pertaining to his Tax record kept by the Authority. 1. 1,000 for the first violation.

2.5,000 in each case of repeated violation within 24 months from the date of the last violation.

5.Failure of the Legal Representative to provide 1,000 notification of their appointment within the specified timeframes, in which case the penalties will be due from the Legal Representative's own funds.

6.Failure of the Legal Representative to file a Tax Return 1. 500 for each month, or part thereof, for the first within the specified timeframes, in which case the twelve months. penalties will be due from the Legal Representative's 2. 1,000 for each month, or part thereof, from the own funds. thirteenth month onwards.

This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted, and on the same date monthly thereafter.

7.Failure of the Registrant to submit a Tax Return within 1. 500 for each month, or part thereof, for the first the timeframe specified in the Corporate Tax Law. twelve months.

2.1,000 for each month, or part thereof, from the thirteenth month onwards.

This penalty shall be imposed from the day following the expiry date of the timeframe within which the Tax Return must be submitted, and on the same date monthly thereafter.

8.Failure of the Taxable Person to settle the Payable Tax. 1. A monthly penalty of 14% per annum, for each month or part thereof, on the unsettled Payable Tax amount from the day following the due date No. Description of Violation Administrative Penalty Amount in AED of payment and on the same date monthly thereafter.

2.For the purposes of this penalty, the due date of payment in the case of the Voluntary Disclosure and Tax Assessment, shall be as follows:

a.20 business days from the date of submission, in the case of a Voluntary Disclosure.

b.20 business days from the date of receipt, in the case of a Tax Assessment.

9.The Registrant submits an incorrect Tax Return. 500, unless the Person corrects his Tax Return before the expiry of the deadline for the submission of the Tax Return according to the Corporate Tax Law.

10 The submission of a Voluntary Disclosure by the A monthly penalty of 1% on the Tax Difference, for Taxable Person in relation to errors in the Tax Return, each month or part thereof, to be applied as of the Tax Assessment or tax refund application pursuant to date following the due date of the relevant Tax Clauses (1) and (2) of Article (10) of the Tax Procedures Return, the submission of the Tax refund Law. application, or the Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted.

11 Failure of the Taxable Person to submit a Voluntary The following penalties shall apply: Disclosure in relation to errors in the Tax Return, Tax Assessment or tax refund application pursuant to 1. A fixed penalty of 15% on the Tax Difference. Clauses (1) and (2) of Article (10) of the Tax Procedures Law, before being notified by the Authority that it will be 2. A monthly penalty of 1% on the Tax subject to a Tax Audit. Difference, for each month or part thereof, to be applied as follows:

a.Where the Taxable Person submits a Voluntary Disclosure after being notified that it will be subject to a Tax Audit by the Authority, the penalty shall be imposed for the period from the day following the due date of the relevant Tax Return, or the submission of the tax refund application or Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted.

b.Where the Taxable Person fails to submit a Voluntary Disclosure, the penalty shall be imposed as of the date following the due date of the relevant Tax Return, or the submission of the Tax refund application or Notification of the Tax Assessment and until the date of issuance of the Tax Assessment.

No. Description of Violation Administrative Penalty Amount in AED

12 Failure of a Person subject to Tax Audit, his Tax Agent 20,000 or Legal Representative to offer facilitation to the Tax Auditor in violation of the provisions of Article (20) of the Tax Procedures Law, in which case the penalties will be due from the Person’s, Legal Representative’s or Tax Agent’s own funds, as applicable.

13 Failure of a Person to submit, or late submission of a 1. 500 for each month, or part thereof, for the first Declaration to the Authority, as required in accordance twelve months. with the provisions of the Corporate Tax Law. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards.

This penalty shall be imposed from the day following the expiry date of the timeframe within which the Declaration must be submitted, and on the same date monthly thereafter.

14 Failure of the Taxable Person to submit a Tax 10,000 Registration application within the timeframe specified by the Authority in accordance with the Corporate Tax Law. [1]

[1] Amended via Cabinet Decision No. (10) of 2024 amending the schedule of violations and administrative penalties of Cabinet Decision No. 75 of 2023 on the administrative penalties for violations related to the application of Federal Decree-Law No. 47 of 2022 on the taxation of corporations and businesses (applicable from 1 March 2024).