If a business does not follow the rules, tax authorities can levy penalties and fine. However, the authorities must of course also follow the (same) rules. An Abu Dhabi court has ordered the Federal Tax Authority (FTA) to refund nearly AED20 million ($5.4 million) to a UAE firm after it was found to have incorrectly penalised it.
The company submitted voluntary disclosures before the FTA in relation to certain services it was unsure were taxable, and so didn’t collect the tax amount from the taxable parties. The decision implies that the company acted in good faith and the tax authorities are not allowed to raise penalties if the company asked for an interpretation.
Source: arabianbusiness.com
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