What happens if I don’t pay the penalty for VAT?

What happens if I don’t pay the penalty for VAT?

The maximum penalty for late payment of VAT is three hundred percent. Submission of erroneous tax returns - penalty is fixed which is at AED 3,000 for the first offense. For any repeated offense, it will come with an AED 5,000 penalty

A fine will be assessed against you if you don't notify the FTA of a necessity to register for VAT within the term stipulated in the Tax Law.

If you don't pay the penalty for VAT, the penalty for late payment of VAT is reduced from 1% per day to 2% per month up to one month & 4% per month thereafter for the period in which the tax remains unpaid with a maximum cap of 300%. The penalty for filing a VAT return late is 2% of the unpaid amount beyond the due date, and an extra 4% will be charged if it is still outstanding even after 7 days¹. The Federal Tax Authority (FTA) has introduced significant penalties for non-compliance with VAT regulations, which range from AED 1000 to 50,000 depending on the severity and nature of the violation.

If you fail to notify the FTA of a requirement to register for VAT within the timeframe specified in the Tax Law, a penalty will be charged against you.

If you don't pay tax penalties the government may Take legal action against your company, and may cancel your licenses