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Case Study: Fine Cancellation Following Value Added Tax (VAT) De-Registration Issue in Dubai

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Client Background

A Dubai-based business faced an administrative challenge concerning their VAT registration. The company received a fine of AED 10,000 for an alleged delay in cancelling its VAT registration, under the provisions of UAE tax regulations. Concerned about compliance and the financial impact, the client approached Fuad House for expert assistance.

Challenge

The primary issue was the alleged delay in cancelling VAT registration, which triggered the fine under the UAE’s tax law framework:

  • Federal Decree-Law No. 28 of 2022 regarding tax procedures
  • Cabinet Decision No. 40 of 2017, outlining fines for tax violations

The client needed to contest the fine while ensuring their registration status was fully compliant with federal tax laws.

Fuad House’s Approach

Fuad House implemented a strategic, step-by-step approach:

  1. Detailed Assessment: Reviewed the client’s VAT registration and the fine notification.
  2. Regulatory Analysis: Interpreted relevant laws to identify the client’s legal standing.
  3. Reconsideration Submission: Prepared a formal request to the Federal Tax Authority, highlighting that the violation was unsubstantiated.
  4. Liaison with Authorities: Followed up with the authority to ensure the request was reviewed and processed correctly.

Outcome

The Federal Tax Authority accepted the reconsideration request and:

  • Cancelled the AED 10,000 fine, confirming that the client had not committed the alleged violation
  • Acknowledged compliance with corporate tax registration requirements
  • Provided confirmation and guidance to avoid future issues

Key Takeaways

This case illustrates the importance of professional guidance in handling corporate tax De-registration and compliance matters:

  • Expert knowledge ensures proper interpretation of UAE corporate tax laws
  • Structured support prevents unnecessary fines and legal complications
  • Effective communication with authorities expedites resolution
  • Businesses gain peace of mind while maintaining full compliance

Client Benefit

By partnering with Fuad House, the client successfully resolved the fine, clarified their VAT Deregistration status, and ensured ongoing compliance with UAE tax regulations.

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