In the UAE Corporate Tax framework, compliance with tax obligations is not only a legal requirement but also a key factor in maintaining business credibility and operational integrity. While the legislation provides avenues for lawful deductions, credits, and refunds, it also sets out clear provisions for addressing violations.
This chapter outlines the mechanisms for assessing corporate tax when discrepancies arise, the conditions under which such assessments may be requested or initiated, and the associated penalties for non-compliance. Understanding these provisions is essential for businesses to avoid financial and reputational consequences.
Article 60 – Assessment of Corporate Tax and Penalties
- A Person, whether an individual or entity, may be subject to a Corporate Tax assessment in accordance with the Tax Procedures Law and the relevant decisions. This means that the FTA has the authority to review, verify, and determine the taxable persons’ corporate tax obligations, particularly in cases of speculated non-compliance, inaccurate reporting, or underpayment.
- Notwithstanding the provisions from the Tax Procedures Law, the FTA may establish additional circumstances and conditions in which a corporate tax assessment can either be requested by a taxable person or initiated by the authority, based on findings from audits, risk assessments, or other regulatory reviews.
- The penalties applicable for non-compliance related to corporate tax regulations are determined by the Tax Procedures Law and its relevant decisions. The penalties may vary depending on the nature and severity of the violation, such as administrative penalties and operational disruptions for deliberate misconduct or fraudulent activities.
Businesses must proactively review their tax positions, address potential discrepancies early, and understand the consequences of non-compliance. To safeguard your businesses against costly penalties, engage with qualified tax professionals, and navigate corporate tax compliance with confidence.
