The understanding of Value Added Tax plays a major role in deciding the profit or loss incurred by a business. The management of the company should make sure that it is in compliance with all the rules and regulations of the business. In case the business is not compliant with the rules and regulations then it has to face certain penalties.
However, it may be possible that the management of the business does not agree with the penalties given to the business and may want to renegotiate them. This is where a VAT reconsideration Application comes into play.
Let us know more about a VAT Reconsideration Application and how it can be submitted by management.
What is a VAT Reconsideration Application?
Seeing the probability that sometimes the management of a business may not agree with the penalties incurred and may want to challenge the decision given by the Federal Tax Authority (FTA). The VAT Reconsideration Application can be understood as an application that will request the FTA to reconsider the penalties given by them. When the Value Added Tax registrant submits the VAT Reconsideration Application then he should also provide all the necessary documents which will provide the evidence regarding the revision of the decision of the penalties incurred.
When should a Business apply for VAT Reconsideration?
There are different circumstances in which a business should use a VAT Reconsideration Application. The major reasons for the utilization of a VAT Reconsideration Application are provided below:
- If there is late VAT return filing
- If there is a Late payment of VAT
- If there is late registration of VAT
- If there is a late VAT deregistration
- If the transactional records are not properly maintained or are missing
- If the management submits the wrong documents regarding the company
What is the process of Submitting VAT Reconsideration Application
There are certain things that the management should keep in mind while applying for a VAT Application Form. According to the FTA, the VAT reconsideration form should be submitted by the management within 20 days of receiving the decision of the authority.
The application must also consist of all the necessary documents which will support the claim of the management. It is seen that the FTA is more responsive to the Vat Reconsideration form when it comprises all the necessary documents in support of the change in penalty. The management can submit the VAT Reconsideration Application using the online portal for more convenience.
To make the process more understandable and easier to process by the Federal Tax Authority (FTA), all the supporting documents must be submitted in the Arabic language.
The FTA will first review the VAT reconsideration request and will check if all the necessary documents are attached or not. If all goes well, the FTA will once again provide its revised decision within 20 days of the acceptance of the VAT Reconsideration Request. Before providing the new decision, the authority will notify the applicant within 5 days that it has accepted the request.
Documents required for VAT Reconsideration Application
The business or management requesting the reconsideration of Value Added Tax must also submit the required documents along with the Vat Reconsideration Application. The documents to include comprise of the following:
- A copy of the passport of the Authorized Signatory
- The Emirates ID of the Authorized Signatory
- Vat Registration Certificate of the entity
- Registered Mobile Number of the Authorized Signatory
- Memorandum of Association of the Authorized Signatory
- The date of the penalty imposed and the amount of the penalty
These supporting documents need to be submitted in Arabic so that the concerned authority can process them faster. The response from the FTA can take up to 40 business days. In case a business has submitted incomplete VAT Reconsideration Application then the FTA will ask the businesses to submit the required documents. The response to the claims of such business will take 40 days from the resubmission of the necessary documents.
VAT can play a very important role in determining the profit and loss of a business and can make or break the profitability of a business. It is in the best interest of the management to have complete knowledge of the Value Added Tax scenario in the jurisdiction and accordingly make plans regarding the future of the business.
If you want to get knowledge about how Vat can affect your business or are facing any business problem regarding VAT, then you can take the assistance of the experts at JAXA Chartered Accountants. It also provides various other services related to Auditing and Accounting. For more details on the services provided, feel free to Contact Us. We will be happy to help.