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VAT Reconsideration allows the taxpayers to appeal the decision made by the FTA regarding the issues of VAT. This may involve disputes of registration, refusal of VAT rejection, penalties or determination. The taxpayer is requesting the FTA to reconsider its decision by filing a reconsideration request and giving reasons why they believe the decision was incorrect and the reasons to back up their case.
The FTA has the mandate of examining reconsideration requests presented by taxpayers. When FTA receives a valid request, it reviews the information, evaluates the reasons given and decides whether to maintain the original ruling or modify the verdict.
1. Review and Assessment: We perform an extensive examination of the decision or assessment of the FTA, with the help of which we can determine the possible mistakes or points of reconsideration.
2. Documentation Preparation: Our group assists in collecting and compiling all the required documents and evidence that may help defend your case of reconsideration.
3. Request Submission: We draft and file a form request of reconsideration with the FTA and provide you with a well-articulated argument based on your paperwork.
4. Follow-Up and Communication: We deal with communication with the FTA, responding to any further questions or needs to help you reconsideration request.
5. Resolution and Advice: We help to interpret the result of the reconsideration process and give directions to the next steps or actions needed.
Generally, you shall be required to submit certain documents and information to facilitate your case when making an application to the VAT reconsideration Services in the UAE. The specifics of your reconsideration request and the circumstances of your particular case may be a reason why exact documents vary.
When seeking VAT reconsideration Services, it is important to take into consideration a VAT consultant or a tax expert so that your request can be full and meet the accepted current regulations, as the requirements of specific documents might vary over time, as well as the FTA might modify its standards and forms. The following are some of the standard documents that might be needed when making a VAT reconsideration request to the Federal Tax Authority in the UAE:
⇒Request form of reconsideration.
⇒ Penalty Notice
⇒ Copy of the passport of the officially authorised signatory and Emirates ID.
⇒ Explanation Letter detailing why you are seeking the release (articulate the circumstances, mistakes or problems under which you were punished)
⇒ The supporting documents (invoices, receipts, bank statements, copies of VAT returns and similar documents, POA or MOA).
→In order to file a request of reconsideration, the following criteria are needed:
1. Timeframe:
The application should be submitted within 40 days of the date of the decision made by the FTA.
2. Language:
All the applications and supporting documents should be presented in Arabic.
3. Documentation:
Include all documents to support the request, including factual and legal reasons, tax advice obtained and any other pertinent evidence.
4. Submission Platform:
Applications are to be made in the portal of e-services of FTA. Registered users will be able to access the Registered Reconsideration tab, and non-registered users will have to use the Non-Registered Reconsideration tab.
You can apply to UAE VAT Reconsideration under the following situations:
1. VAT Registration Issues:
⇒ In case your registration/ deregistration application under VAT is denied, even though you have reached/ crossed the threshold or even satisfied the necessary conditions, you may appeal to the FTA to reconsider it. This is applicable in new businesses or those that are shutting down.
2. Penalties and Fines:
⇒In case you have received fines on late filing of returns, non-payment of VAT within time, and other compliance-related matters, and you feel that the penalties were unreasonable, or as a result of reasonable circumstances, you can seek reconsideration.
3. Tax Assessments:
⇒ If FTA has determined a greater VAT liability than the amount it should have determined- probably caused by misinterpretation, or mistakes in my submitted returns- then I may seek reassessment with supporting documents.
4. VAT Refund Claims:
⇒In case your claim regarding a VAT refund has been partially or fully denied and you feel that you should be allowed the entire amount, a reconsideration request will enable you to appeal against the ruling.
5. Voluntary Disclosure Rejections:
⇒ Provided that you have attempted to correct a previous VAT return through a Voluntary Disclosure, for which the FTA refused or imposed a penalty, then you may apply for a review, provided that you have good reasons or evidence.
6. Administrative Decision-Making Entails Inaccuracies:
⇒ In some cases, the FTA can make decisions which cannot be founded on the misinterpretation, incompleteness of data or technical mistakes. In case you feel any administrative decision has been arrived at in a manner that is unfair or incorrect, then you can appeal.
7. Input Tax Rejections:
⇒ Where the FTA has denied you all or some part of your input tax claim (such as claiming VAT on expenses), and you feel the costs were allowable, you may ask to have your claim reconsidered through clear and well-explained documentation.
8. Refusal of Grouping Application on Tax:
⇒In case the FTA has rejected your request to have a group VAT tax with other related companies, even when you satisfy the conditions, you may request the FTA to review this decision.
It’s crucial to act promptly. You need to file your reconsideration request within 40 business days after having received the decision of the FTA. Failure to meet this deadline can lead to the disapproval of your request.
It was an extension of the earlier 20 business days, which was done by making alterations in the UAE Tax Procedures Law. Following your request for reconsideration, the FTA must consider your request and make a decision within 40 business days and inform you of its decision within 5 business days.
In case you are still dissatisfied with the decision made by the FTA, you can take the issue to the Tax Disputes Resolution Committee (TDRC) within 40 business days of being informed of the reconsideration decision.
You can consider making an application to the UAE VAT Reconsideration under the following circumstances:
1. VAT Registration Issues:
In case of rejection of your application for either VAT registration or deregistration, though you satisfy the threshold or you have satisfied the necessary conditions, you may ask the FTA to reconsider its ruling. This applies to the new businesses or those shutting down.
2. Penalties and Fines:
In case the penalties have been imposed on you because of late filing returns, failure to pay VAT on the right time or other compliance-related reasons, and you think that the penalties were unfairly determined or on valid reasons, then you may seek reconsideration.
3. Tax Assessments:
In case FTA has determined that the VAT charge is more than expected- say your returns were not understood or some mistakes were made in the returns that were submitted, you can seek a reassessment accompanied by documentary evidence.
4. VAT Refund Claims:
In case your request to claim a VAT refund is rejected, in part or entirely, and you feel that you are entitled to receive the amount in full, you can appeal against the decision by a reconsideration request.
5. Voluntary Disclosure Rejections:
When you have corrected a previous VAT return in a Voluntary Disclosure and the FTA declined to accept it or fined you, you may seek a review, provided that you have good reasons or can provide evidence to support this.
6. Mistakes in Administrative Decisions:
There are instances when the FTA can make rulings that are either misinterpreted, incomplete or made through technical inaccuracies. In case you feel any administrative decision has been taken improperly or wrong, you can appeal.
7. Input Tax Rejections:
Where part or the entirety of your claim on input tax has been disallowed by the FTA (such as the claiming of the VAT on expenses), and you think that the costs were allowable, you can apply to have your case reconsidered with complete documentation and argument.
8. Application Denied because of Tax Grouping:
In case the FTA has denied your request to include other related companies in a VAT tax group, even though you have already satisfied the requirements of the same, then you may request that they reconsider their decision.
In the UAE, there are some requirements before one can apply to have their VAT reconsidered. The Federal Tax Authority (FTA) merely takes requests from people or businesses, which will be directly affected by a tax-related decision. Here’s who can apply:
→ Registered Taxpayers:
→Any person or company registered for VAT with the FTA.
→ Applicants whose FTA Decision impacts:
→In case the FTA has made a ruling that either directly affects you or your business, like a refused registration, a fine, or a refused refund-you can apply.
→ Authorised Representatives:
→The reconsideration request could also be made by a tax agent or legal representative who may be a person authorised to represent the taxpayer.
VAT reconsideration can be described as a significant procedure that helps taxpayers and businesses to appeal against VAT fines or VAT determinations given by tax authorities. Pursued successfully, the VAT reconsideration service can introduce a plethora of benefits that would inject accountability, visibility, and financial alleviation into the tax system. Having said that, the positive sides of VAT reconsideration are as follows:
1. Financial Relief: This financial relief may increase cash flow, financial well-being and the overall economic well-being.
2. Penalty Reduction: The VAT reconsideration services allow the taxpayers to request a reduction or a total elimination of VAT penalties. The result is high-cost savings so that individuals and businesses are not excessively taxed with unreasonable fines.
3. Transparency and Accountability: It provides a chance to be heard by the taxpayers, and that is, the decisions made by the tax authorities are also reviewable.
4. Equity and justice: These are important in ensuring trust and fairness in the tax system.
5. Legal Compliance: VAT reconsideration services are done to make sure that taxpayers adhere to the right legal procedures when challenging penalties to guard against any other legal actions that have a bearing on non-compliance.
6. Personalised Solutions: This will encourage a more sensitive and receptive approach to taxation.
Here are some common questions about VAT reconsideration
Reconsideration of VAT is an administrative action by the taxpayers who may seek the FTA to revisit and potentially overturn a ruling, fine or assessment they feel is erroneous.
A company has a chance to seek VAT reconsideration within 20 business days of receiving the initial decision, review or penalty announcement by the FTA.
Typical examples are the imposition of penalties, rejection of VAT returns, refusal or cancellation of tax register, and other government FTA decisions that are adverse to the taxpayer.
The applications should be made via FTA e-Services portal. The application should be supported with all the supporting documents, evidence, and a detailed reasoning, which should be in Arabic because the FTA only accepts the reconsideration requests in Arabic.
The request is reviewed by the FTA and a decision is given within 20 business days. The new decision will be delivered to the applicant and FTA can seek clarification or documents during this time.
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