The Federal Tax Authority (‘FTA’) has issued an amended Voluntary Disclosure User Guide for VAT and Excise Tax (“VD User Guide”), an update to the version issued in July 2018.
Summary of changes
The updated VD User Guide gives further explanations on requirements and procedures specifically related to the submission of Voluntary Disclosures for active and deregistered Tax Groups, summarized below.
- Tax Group Voluntary Disclosures shall be submitted by the active Group representative member only, or by the last representative member before the Tax Group was deregistered.
- Other Tax Group members can only view submissions made to the FTA by the representative member.
- Voluntary Disclosures can be submitted against submitted VAT returns, acknowledged Voluntary Disclosures, or acknowledged tax assessments. The VD User Guide provides separate procedures on how to access the Voluntary Disclosure form in each of the scenarios above.
- In line with the guidance available previously, an official letter must be prepared and attached for the FTA’s review along with the Voluntary Disclosure form. The letter shall include background facts and a detailed description of the errors disclosed. Such letter shall be prepared regardless of whether the Voluntary Disclosure is submitted by an active or deregistered Tax Group.
Effective 28 June 2021, the Cabinet Decision No. 49 of 2021 introduced a number of beneficial provisions, including reductions in penalties where taxpayers submit Voluntary Disclosures, aimed at encouraging taxpayers to correct any mistakes made previously by submitting Voluntary Disclosures to obtain reduced penalties.
As a reminder, under the mentioned new penalty regime, the application of the voluntary disclosure penalties has changed, whereby the penalty calculation does not, anymore, depend on the taxpayer’s/ FTA overall net balance resulting from the correction, but instead is calculated on the amount of the correction made in the submitted voluntary disclosure.
KPMG has a team of experienced tax specialists that can help you assess your current tax position, prepare VAT Voluntary Disclosures and clarification requests, advise on the appropriate tax treatment, or represent you in front of the FTA as registered tax agents.
We are happy to discuss your specific circumstances with you and determine the way forward should you have any questions or concerns in this regard. Please get in touch with your usual KPMG contact or any of the tax professionals below.