Received Penalties For Non-Submission Of ESR Report?!. File An Appeal

Received Penalties For No-Submission Of ESR Report?!. File An Appeal

Did you successfully submit the Economic Substance Notification & Economic Substance Report of your company to the Ministry of Finance?

Did you get any response from the authority is after that?

Many licensees in the UAE have come across penalty emails from the Ministry of Finance.

Did you get any such penalty email?

If yes, do you know how to resolve the issues? In order to resolve such issues, we should know exactly the reason for receiving such a penalty ticket from the Authority. We have listed down some of the reasons why you might have received penalty emails

Situation in which Economic Substance Notification is submitted declaring a Specific Relevant Activity. Later the Economic Substance notification amendment was filed that it is not covered in Relevant activity neither earning relevant income in the Economic Substance Notification.

In this case, the company need not submit the Economic Substance Report. But the approval for Amendment on Economic Substance Notification might have taken the time and by then the Economic Substance Report Tab becomes active.

Economic Substance Report was not filed since it is not carrying relevant activity . Still, the penalty ticket may raise.

How to waive off the penalties generated from situations like above?

In the above-given scenarios, the Licensee or Exempted Licensee will have the option to Appeal.

Article 13 & 14 of the Economic Substance Regulation provides the offences & penalties for failure to provide Notification and Report, respectively.  The administrative penalty will be levied on that Licensee or Exempted Licensee who fails to submit Notification & Report (wherever applicable) as below:
Failure to submit    Penalty Amount

Failure to submit Penalty amount
ECONOMIC SUBSTANCE REGULATION [ESR] Notification AED 20,000
ECONOMIC SUBSTANCE REGULATION [ESR] Report AED 50,000

 

If there is a delay in submitting Economic Substance Notification or Economic Substance Reports, and if such delay is because of the ignorance of the Law, the chance of getting approval for waiving off the penalty cannot be assured through an appeal.

But there are genuine cases as mentioned at the beginning of this article, where the penalty can be appealed and removed. We are happy to resolve your issues by submitting the Appeal to the Authority.

Temporary Zero-rating of Certain Medical Equipment

On 1 September 2020, the Cabinet issued a Cabinet Decision No. 9/12 O of 2020 (“Cabinet Decision”). The Decision concerns the temporary application of VAT at the 0% rate on certain supplies and imports of medical equipment. Furthermore, the Ministerial Decision No. 380 of 2020 (“Ministerial Decision”) issued by the Minister of Health and Prevention on 6 December 2020 (with effect from 1 September 2020) specifies the medical equipment that are zero-rated in accordance with the Cabinet Decision. In accordance with Cabinet Decision No. 15/3 O of 2021, the above decisions shall be effective until 31 December 2021.

In accordance with the Cabinet Decision, a supply or import of certain medical equipment may be zero-rated. It should be noted that that the zero-rating of supplies and imports under the Cabinet Decision is separate, and in addition to, zero-rating of any other medical equipment in accordance with Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate.

The “medical equipment” to which the temporary zero-rating rules apply are personal protective equipment used for the protection from Covid-19, and which contain the features and meet the specifications determined and specified by the Ministerial Decision. Such medical equipment are limited to:

  • Medical face masks that are not included in the Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate (of approved standards 14683 and UAE.S ASTM F2100);
  • Half filtered face mask (UAE.S EN 149);
  • Non-Medical “community” face mask made from textile (UAE.S 1956);
  • Single-use gloves (UAE.S ISO 374-2); and
  • Chemical disinfectants and antiseptics intended for use on the human body, but excluding detergents, cosmetics and personal care products (UAE.S EN 1276, EN 1650, and EN 14476:2013+A2).

CONDITIONS TO ZERO-RATING

Date of supply/import of above mentioned medical equipment shall be within the period beginning from 1 September 2020 to 31 December 2021.

With The Vat Registration In UAE Fill Proper VAT Form

Vat Registration In UAE

There are four major advantages to being Vat Registration In UAE that small businesses can willingly enjoy. At present, UAE based agencies only need to sign up for VAT if their revenue is £83,000 or more throughout year.

The Government taxes VAT (Value Added Tax) against goods and services within the UAE. The existing VAT rate is benchmark 20%, lower rate 5%, and zero rates 0%.

The standard charge of VAT will be valid to most goods and services retailed. The decreased rate will apply to businesses like children’s car seats and energy service providers. Zero rates will use to food and children’s clothes.

Also Read :- Liquidation Services In Dubai

Thus, if you are running a small business, how can you get advantage from being VAT registered?

  1. You get a VAT registration number

This might not look too thrilling, but your business can benefit from showing your VAT registration number on all your papers, website, and stationery. Vat Registration In UAE This can increase reliability to your business and provide you a more dependable and professional picture.

  1. You can claim VAT refunds

Once registration done, you can get back for VAT on all goods and services your business purchases. This should be balanced with what your business is charging and obtaining in VAT payments over the year. If you have spent lots of bucks in equipment, plant, apparatus or IT, you can easily recover a huge amount of VAT.

When it is best time to submit your VAT return, you can find that the HMRC sends you some money for a transform!

  1. You can improve your business image

If you are running a new small business, another advantage to being VAT registered is that many individuals are attentive of the VAT threshold. You then come out to your prospective customers that you are larger than you actually are by showing your VAT number.

This can also assist you when it comes to managing other businesses. Some businesses choose it if you can increase a suitable VAT invoice.