General UAE Legal Questions LawCabinet Resolution No. (105) of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties

Article (1) Definitions For the purposes of implementing the provisions of this Resolution, the following terms and expressions shall have the meanings assigned to each of them, unless the context requires otherwise: The State : United Arab Emirates (UAE). Ministry : Ministry of Finance. Authority : The Federal Tax Authority (FTA). Committee : A committee formed by a decision of the Chairman of the Board of Directors of the Authority in accordance with Article (46) of Federal Law No. (7) of 2017 Regarding Tax Procedures, as amended. Tax Procedures Law : Federal Law No. (7) of 2017 Regarding Tax Procedures as amended.

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Cabinet Resolution of 2021 Regarding the Controls and Proced…

Article (2) Scope of Application The provisions of this Resolution shall apply to requests for installment, waiver, and refund of Administrative Penalties, in whole or in part, imposed on any Person for violating the provisions of the Tax Procedures Law or the Tax Law.

Article (3) Controls for the Installment of Administrative Penalties The Committee shall approve the payment of Administrative Penalties in installments if the following are met: 1. The Instalment Request shall apply only to unpaid Administrative Penalties. 2. The Administrative Penalties required to be paid in installments shall not be less than (AED 50,000) Fifty Thousand Dirhams, and the Committee may make any amendment to this amount. 3. Administrative Penalties, the subject of the Installment Request, shall not be under dispute before the Tax Dispute Resolution Committee, the competent courts or any other entities concerned with considering tax objections or appeals, in accordance with…

Article (4) Controls for the Waiver of Administrative Penalties The Committee shall approve the waiver of Administrative Penalties if the following are met: 1. The violation for which the Administrative Penalties were imposed shall not be related to a Tax Evasion offense. 2. The Request shall be submitted within the period specified by the Committee. 3. The Person’s Request shall be related to one of the following cases: a. The death of a registered natural person or the owner of a sole proprietorship,

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Cabinet Resolution of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties 4 provided that the death was a direct cause…

Article (5) Procedure for Submitting Installments and Waiver Requests 1. Requests for installments or waiver of Administrative Penalties shall be submitted to the Authority using the forms prepared thereby for this purpose. The Request shall include the following documents and data: a. The Person's name and information, including e-mail and correspondence address; b. Tax Registration Number (if any); c. The amount of Administrative Penalties and violations related to the Request;

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Cabinet Resolution of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties 5 d. The date of imposing the Administrative Penalties subject of t…

Article (6) Submission of Installment and Waiver Requests 1. The Authority shall review the Requests submitted thereto by the Person and verify their compliance with the controls and procedures stipulated in this Resolution. 2. The Director General of the Authority shall refer the Requests received and found to be compliant with the procedures mentioned in Article (5) of this Resolution to the Committee within a period not exceeding (40) forty working days from the date of receiving the Request, along with an assessment of their conformity with the controls specified in this Resolution.

Article (7) Committee Procedures and Consideration of Requests 1. The Committee shall determine the timeframes within which the Waiver Requests shall be submitted; 2. The Committee shall establish the Administrative Penalty Installment Scheme and its Plans in accordance with the schedules approved thereby and the controls and dates for paying the advance payment; 3. The Committee shall review and approve the Administrative Penalty Installment and

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Cabinet Resolution of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties 6 Waiver Requests if they are found to meet all the controls and procedures stipulated in this Resolu…

Article (8) Implementation of The Committee’s Decisions 1. The Authority shall notify the person, at the address or e-mail indicated in their request, of the Committee’s decision within (10) ten working days from the date of its issuance. 2. In the event of approval to pay the imposed Administrative Penalties in installments, the Authority shall notify the person of the details of the plan set by the Committee. 3. The Installment Beneficiary shall comply with the payment of the installments in accordance with the installment decision determined by the Committee. 4. The Authority shall follow up on the implementation of the Committee’s decisions and ensure the person’s compliance with the pay…

Article (9) The Committee may cancel the installment decision in the event of default in payment, and it may take the following procedures: 1. Determine a new plan for the person in the event that the reasons for default are presented to and accepted by the Committee. 2. Direct the Authority to take the necessary legal procedures to collect Administrative

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Cabinet Resolution of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties 7 Penalties.

Article (10) Notwithstanding the obligation to submit an Administrative Penalty Waiver Request, the Director General may refer any of the cases provided for in Clause (3) of Article (4) of this Resolution to the Committee for the purposes of waiving Administrative Penalties imposed on a Category of Persons, provided that the grounds for referring the case are specified, including the extent of its compliance with the controls and procedures.

Article (11) Controls and Procedures for Refunding Administrative Penalties 1. The Committee shall determine the cases and rules for refunding penalties collected during the five (5) years preceding the date of consideration of their refund, in a manner that achieves tax justice and equality between the legal positions of Taxable Persons. 2. The Authority shall study the financial implications of refunding Administrative Penalties and submit recommendations thereon to the Committee.

Article (12) 1. The Director General shall present, to the Committee, the cases in which the refund of Administrative Penalties is proposed. 2. For the purposes of this Article, the Committee shall determine the Administrative Penalties that it agrees to refund, the reasons for their refund and their total amount to be refunded for each category of registered Persons covered by the refund.

Article (13) Refunds of Administrative Penalties shall be as follows: 1. By crediting them to the tax account balance of the beneficiary within (90) ninety days from the decision approving the refund of Administrative Penalties. 2. By cash refund in the event of revocation of the Person’s registration, in accordance with

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Cabinet Resolution of 2021 Regarding the Controls and Procedures for the Installment, Waiver, and Refund of Administrative Penalties 8 the procedures followed by the Authority.

Article (14) If the Committee decides to reject the Administrative Penalties Waiver or Installment Request, the Authority shall take the necessary legal procedures to collect them.

Article (15) Transitional Provisions 1. The Authority shall refer all Reduction and Waiver Requests to the Committee if they were submitted thereto and have not been decided upon by the Authority prior to the entry into force of Decree by Law No. (28) of 2021 Regarding the Amendment of Certain Provisions of Federal Law No. (7) of 2017 regarding tax procedures, or If it was received prior the issuance of this resolution. 2. The Requests specified in Clause (1) of this Article shall be referred, after observing the controls provided in this Resolution, and for this purpose, the Authority may request any additional data.

Article (17) Resolution Publication and Entry into Force This Resolution shall be published in the Official Gazette and shall enter into force on 01 March 2022. Mohammed Bin Rashid Al Maktoum Prime Minister Issued by Us: Dated: 23 Jumada al-Awwal 1443 A.H. Corresponding to: 28 December 2021 A.D.

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Article (26) of Cabinet Resolution No. (36) of 2017 Regarding the Executive Regulations of Federal Law No. (7) of 2017 Regarding Tax Procedures, as amended, shall be repealed. Any provision that contradicts or conflicts with the provisions of this resolution shall be repealed.

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