Avoid Costly Penalties: Update Your FTA Records Promptly
![UAE Tax Registrants must submit an amendment application within 20 days for changes in their records with the FTA](https://audiix.com/wp-content/uploads/2024/07/penalty.jpg)
Keeping your tax records up to date with the Federal Tax Authority (FTA) is a legal requirement in the UAE. Here’s what you need to know to avoid AED 10,000 late amendment penalties and ensure compliance.
Brief
- Notification Requirement: Fore changes in your tax records with the FTA, submit an amendment application within 20 days.
- Penalties for Non-Compliance: AED 5,000 for the first failure, AED 10,000 for subsequent failures.
- Information to Update: Business address, activities, partners, and other records with the FTA.
Detailed Insight
Late Amendment Penalties
The FTA has stringent penalties for failing to update your records on time:
- Initial Penalty: AED 5,000 for the first failure to notify the FTA within the 20-day period.
- Subsequent Penalty: AED 10,000 for any subsequent failures.
How to Notify the FTA?
UAE Tax-registered individuals and businesses must:
- Log in to Emaratax Portal: Use your account to file amendment application.
- Submit Amended Information: Include all necessary documents and details of the changes.
- Deadline: Submit the application within 20 business days from the date of the change.
- FTA Review: The FTA will review and either approve the application or request additional information.
Types of Changes to Notify
- Legal Name: Any changes to the Registrant’s name.
- Address: Updates to physical or mailing addresses.
- Email Address: Changes to the contact email with the Authority.
- Trade License: Renewal or amendments, including activities, address, managers, owners, and contact details.
- Legal Entity Type: Changes in entity type (e.g., sole proprietorship to LLC).
- Partnership Agreements and Articles of Association:
- Unincorporated partnerships: Changes in partnership agreements.
- Incorporated entities: Updates to articles of association, including business names, managers, partners, and ownership.
- Nature of Business: Modifications to business operations.
- Business Address: Changes to the business operating address, or adding branches.
Practical Steps for Compliance
- Monitor Records: Regularly check the validity and expiry of your tax records, including: license, partners IDs & passports, rent contract.
- Amend the license for any changes such as address update even before the license expire and notify the FTA for the change within 20 business days.
- If you’re on a Flexi-desk in a free zone, request the rent agreement from the free zone authority, and update the FTA for any changes.
- Communicate with Your Tax Agent: Ensure your tax agent or legal representative is aware of any changes or renewals on a timely basis.
- Timely Submission: Ensure amendment applications are submitted within 20 business days of any changes, and keep a copy of the acknowledgement and references of the application.
Laws References
- Federal Decree-Law No. 28 of 2022: Tax Procedures Law.
- Cabinet Decision No. 74 of 2023: Executive regulations on tax procedures.
- Cabinet Decision No. 49 of 2021: Penalties.
Disclaimer
This information summary is provided for general awareness purposes only and is not intended to replace an accounting, tax, or professional advice. Please seek professional advice before making any decision. We assume no liability or responsibility for any errors, omissions, or inaccuracy in this content.