In July 2018, the FEDERAL TAX AUTHORITY released the Voluntary Disclosure User Guide specifying the steps to be followed for the notification of any error or omission in a tax return, refund or assessment through a Voluntary Disclosure Form. 
It includes the procedures of filing Voluntary Disclosure Form and the scenario of such form submissions. Primarily, such amendment to original tax returns warranties penalties as per Cabinet Resolution (40) of 2017. 
As per the specifications the submission of false tax return will lead to a fine of AED 3,000 initially and AED 5,000 for repetition.
The fine can be on a percentage basis for the amount unpaid to the Authority due to the error and resulting in a tax benefit as 5% if the Registrant makes a voluntary disclosure before being notified of the tax audit by the Authority.
If a TAXABLE individual fail to clear his/her tax fines mentioned in the Tax Return or Tax Assessment reported to him/her before the time span briefed in the TAX Law then he have to submit a charge of 
      • 2% of the unpaid tax is due immediately once the payment of Payable Tax is late; 
      • 4% is due on the seventh day following the deadline for payment, on the amount of tax  which is still unpaid. 
      • 1% daily penalty charged on any amount that is still unpaid (one calendar month) following the deadline for payment 
Rather than these interpretable facts there exist some mismatches in it. The command mentions that there are fixed & flexible fines. Also it states that there are fines on unpaid taxes from such original date tax payment constraints.
Let us explore it through a scenario:
XYZ LLC, a tax registrant in Dubai, in the mid of an internal audit review noticed some missed out sales in the account system & tax return also. XYZ LLC,files a Voluntary Disclosure Form for that particular tax period to heal this mistake as per their TAX consultant advice . XYZ LLC analyses that they have to submit a fixed penalty of AED 3,000 while the verification of VDF & an additional 5% fine on the unpaid tax as he is revealing this is without any notification from FTA. But on submission XYZ LLC the fine is larger than the expected. On investigation we get to know that the system has charged a non-payment fine for the concerned individual which was calculated from the original due date of the return for which ABC LLC filed VDF. In reality we can conclude that such non-payment fines should not be implied on Voluntary Disclosure Form submission as they neglect the purpose of it and lead to dispute which may enter the court. Court views:
      • Federal Tax Authority & taxable individuals do not have a legal relation but a structural one prioritizing peremptory laws.
      • Returns and voluntary self-certifications are due to the payable tax to be paid. There should be a breakdown fee for the delay of paying the due tax stated in the voluntary self-certification to be paid, according to Article 9 of the table no. 1 attached with the Cabinet decision no. 40 for 2017, and applying breakdown fees is  in case of not paying the due tax without the voluntary self-certification.
      • The statement that breakdown fees are not applied on voluntary self-certification is to deprive the capital of the due taxes for a long period until when the voluntary self-certification submission & its payment is acceptable by the taxable individual.
      • Inaction of paying the due tax includes the submission of breakdown fees either it is mentioned in return or in the voluntary self-certification.
SUMMARY:  The authorized judgement from the Federal Court causes misinterpretations in the regulations. Even if we state that it may bring a numerous financial modulations in business, it is better to have a guaranteed tax system to remove such compliance costs. A pre tax audit review of your organization can bring the UAE tax law and your tax systems closer. This will also help you to take proactive decisions in the changing compliance circumstances.     
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