Mistakes Businesses Can Make Related to VAT and their Penalties
                     
Mistakes Businesses Can Make 
Related to VAT and their Penalties
Failure to display the prices of products and services inclusive of Value Added Tax (for a 
tax-registered person)
All businesses that have registered for VAT are to display prices of goods and services if they are taxable, 
including the VAT
Failure to notify the tax authorities recharge of tax that’s based on margins
A business registered for VAT is to calculate VAT based on the profit margin for supplies of certain goods 
such as coins, stamps, and secondhand goods among others
Mistakes Businesses Can Make 
Related to VAT and their Penalties
Failure in complying with procedures and conditions that are related to the storage of 
goods in designated zones or moving them onto other designated zones
A VAT-registered person that doesn’t comply with procedures and conditions that are in related to 
designated zones will be given Dh50,000 as an administrative penalty. The penalty may also be fifty per 
cent of the tax that is chargeable because of violating the regulation, whichever would be higher.
Failure in issuing Tax invoices to clients and customers or any alternative document 
which signify the occurrence of Transactions
A tax invoice is an incredibly important document that is to be issued to a client or customer whenever a 
supply of taxable services or goods is made. When businesses fail in issuing tax invoices or alternative 
documents for taxable supplies, they invite the Dh5,000 administrative penalty to be imposed on them
Mistakes Businesses Can Make 
Related to VAT and their Penalties
Failure by a VAT registered business in issuing tax credit notes or alternative documents 
to clients or customers
Tax credit notes are written or electronic documents that signify the occurrence of amendments to 
taxable supplies, reducing or cancelling the same which are recorded.
Failure by a VAT Registered business in complying with procedures and conditions in the 
issuance of e-tax credit notes as well as e-tax invoices
If a VAT registered business doesn’t comply with conditions for the issuance of e-tax credit notes and e-tax 
invoices, it’s going to invite the business Dh5,000 as an administrative penalty for every single tax credit 
note or tax invoice wherein conditions of the FTA were not met.
Thank You
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Tel: +971 4 2555496  |  Fax: +971 4 2501558
Email: [email protected]
Web: https://farahatco.com/
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