Taxpayer Rights and Redetermination

Taxpayer Rights

The UAE VAT framework provides mechanisms for taxpayers to challenge FTA decisions and seek relief from penalties.

Penalty Redetermination

Under Cabinet Decision No. 49 of 2021, a taxpayer may request redetermination of penalties. The FTA will consider:

1. Voluntary disclosure: If the taxpayer disclosed the error before the FTA discovered it.
2. Cooperation: The degree of cooperation during FTA audits and investigations.
3. Remedial action: Whether the taxpayer implemented corrective measures to prevent recurrence.
4. First-time violation: First-time offenses may receive more lenient treatment.

Instalment Plans

The FTA may allow taxpayers to pay penalties in instalments where:

• The taxpayer demonstrates genuine financial hardship
• The taxpayer has entered into a payment plan agreement
• The taxpayer is compliant with ongoing obligations during the instalment period

The Appeals Process

If a taxpayer disagrees with an FTA assessment or penalty:

1. Reconsideration request: The taxpayer may request the FTA to reconsider its decision.
2. Tax Dispute Resolution Committee (TDRC): If reconsideration fails, the taxpayer may file an objection with the TDRC within 20 business days.
3. Federal Primary Court: If the TDRC decision is unfavorable, the taxpayer may appeal to the Federal Primary Court.

Time Limits

• Reconsideration requests: Within the period specified in the FTA notice
• TDRC objection: Within 20 business days of the FTA's reconsideration decision
• Court appeal: Within 20 business days of the TDRC decision

Best Practices

• Respond to all FTA correspondence promptly
• Maintain detailed records of all communications
• Seek professional tax advice for complex disputes
• File voluntary disclosures proactively to reduce penalties