Time for UAE businesses to resolve all outstanding tax issues is now

Time for UAE businesses to resolve all outstanding tax issues is now

By end 2022, VAT and excise tax will mark five years of their existence in the UAE. Despite one not having done anything wrong or believing their business is tax-compliant, one could find themselves slapped with an unexpected tax liability or penalty either due to a difference in opinion, or an unintentional error identified in the audit. Should UAE businesses worry about the Federal Tax Authority (FTA) auditors coming around to ask questions about the returns filed many years ago? We discuss here the topic of Statute of Limitation, which could answer this question. A Statute of Limitation is a legal term that sets the maximum period within which one must file a claim or commence any legal action. Any action must be taken within the prescribed limitation period. Under the UAE VAT and excise law, the statute of limitation sets out a timeframe within which tax authorities must initiate a tax audit on the taxpayer. If not commenced within the given deadline, FTA’s claim for undertaking a tax audit or raising a tax demand on the taxpayer becomes time-barred, i.e., inadmissible. The tax procedures law provides an expiry of five years from the end of the tax period for