Voluntary Disclosure (VD) Application Process (Art. 10)
Official Principle: "Allows taxpayers to self-correct tax return errors and pay reduced penalties before an FTA audit begins." — Позволяет самостоятельно исправить ошибки в декларации с существенным снижением штрафов до проверки.
📊 Regulatory Parameters & Compliance Table
| Enforcement Action | Statutory Trigger | FTA Penalty Amount | Mitigation Mechanism |
|---|---|---|---|
| Late Registration Penalty | Missing Corporate Tax deadline | AED 10,000 fixed penalty | Waiver request / EmaraTax ticket |
| Late VAT Registration | 30 days after threshold breach | AED 20,000 administrative penalty | Immediate voluntary registration |
| Tax Return Inaccuracy | Under-declared tax liability | Up to 50% + AED 1,000 fee | Voluntary Disclosure (Form 211) |
| Record Keeping Failure | Missing invoices / no IFRS audit | AED 10,000 to AED 20,000 | 7-year organized ledger archive |
✓ Mandatory Compliance Action Steps:
- Conduct pre-audit diagnostic review of tax filings and general ledger reconciliations
- Prepare Voluntary Disclosure (Form 211) immediately upon discovering accounting errors
- Ensure response to FTA Information Notices is submitted within the mandatory 5-day window
- Maintain audit-ready IFRS trial balances and verified tax invoice archives
- Engage a licensed tax agent to represent the taxable person in FTA dispute proceedings
1. Core Statutory Provision & Key Legal Rule
"Allows taxpayers to self-correct tax return errors and pay reduced penalties before an FTA audit begins."
"Позволяет самостоятельно исправить ошибки в декларации с существенным снижением штрафов до проверки."
2. Practical Application for UAE Businesses
Under the UAE federal tax framework governed by Federal Decree-Law No. 28/2022, Art. 10, all taxable persons registered across Mainland jurisdictions and Free Zones (including Meydan, DMCC, DIFC, IFZA, DAFZA, and JAFZA) must align their accounting policies with this requirement.
- IFRS Accounting Standard: Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS or IFRS for SMEs).
- Record Retention: Primary accounting records, bank reconciliations, contracts, and tax filings must be archived for a minimum statutory period of 7 years.
- Audit Readiness: The Federal Tax Authority reserves statutory rights to request ledgers and supporting invoices during an official tax audit with a 5-day response window.
3. FTA Administrative Penalties (Cabinet Decision No. 75/2023)
Failure to register, inaccurate return filing, or violation of Federal Decree-Law No. 28/2022, Art. 10 exposes the taxable entity to administrative fines starting from AED 10,000 up to AED 20,000 per incident, plus 1% monthly late-payment penalties.
Solution: Timely registration through the FTA EmaraTax portal and voluntary disclosure (Form 211) before an official audit notice is served.
Have Questions Regarding Voluntary Disclosure (VD) Application Process (Art. 10)?
Our licensed tax consultants and certified auditors in Meydan Free Zone, Dubai will review your contracts, calculate exact tax liability, and safeguard your company from FTA penalties.