DUBAI: Dubai’s Federal Tax Authority (FTA) board is considering the refunding of VAT amounts paid by tourists, it has emerged.
An FTA meeting, headed by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and chairman of the FTA, reviewed the outcome of the tourist refund tender. The integrated refund system – currently being developed – will cover outlets and shops in the country, said a report in Emirates News 24|7.
Furthermore, a plan to exempt businesses that are late in registering with the FTA from penalties until April 30 was approved by the board.
The UAE implemented the 5 per cent VAT from the start of this year, and businesses were initially required to register by the end of last year, it said.
In the first phase, all businesses that sell goods or services exceeding Dh375,000 ($102,084) are required to submit tax returns and pay their dues within a set timeframe (28 days) or face penalties.
The penalty for those who fail to pay tax is no less than Dh500 ($136) and no more than triple the value of the tax on the transaction in question.
A first incorrect tax filing will result in a fine of Dh3, 000 ($816.6). Each following error will then result in a Dh5, 000 ($1,361) fine, the report said.
Sheikh Hamdan said: “The results of the periodic follow-up show that the response levels to the tax system by the business sectors and all segments of society are very satisfactory. There is a steady increase in the tax compliance ratios, which confirms the success of the model adopted by the FTA which is based on encouraging self-compliance by businesses through easy electronic registration and electronic compliance.