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Frequently Asked Questions on VAT

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Is there any penalty for submitting a Voluntary Disclosure for VAT returns?

You will have to pay administrative penalties when submitting a Voluntary Disclosure, or Form 211, like you do for filing late tax returns. These penalties vary depending on your specific case. 

There are two types of penalties when you submit a Voluntary Disclosure:

  • Fixed Penalty: The first time you file a Voluntary Disclosure, or Form 211, without any notification from the FTA, you will have to pay a fixed penalty of AED 3,000. From then on, every subsequent submission of Form 211 will require you to pay a penalty of AED 5,000.

  • Percentage-Based Penalty: This penalty is based on the amount that was not orignally reported. For example, if you disclosed a tax liability of AED 100,000, but later realise you should have disclosed a tax liability of AED 150,000, then the percentage-based penalty will be levied on the difference in these amounts: AED 50,000. 

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