Administrative Exceptions
VAT Administrative Exceptions can be a lifeline for businesses facing challenging circumstances. They offer some leeway in adhering to the strict procedural aspects of VAT regulations in the UAE. In this blog post, we'll understand VAT Administrative Exceptions, who can apply for them, and the categories they encompass.
What Are VAT Administrative Exceptions?
VAT Administrative Exceptions are a set of provisions outlined in Federal Decree-Law No. 8 of 2017 on Value Added Tax and its Executive Regulation, Cabinet Decision No. 52 of 2017. These exceptions provide a buffer for registrants when difficult situations hinder them from complying with specific aspects of VAT regulations.
Who Can Apply for VAT Administrative Exceptions?
To apply for a VAT Administrative Exception, you must meet the following criteria:
• You should be a registrant with the Federal Tax Authority (FTA).
• You need to fulfill the specific requirements related to the relevant exception you're seeking.
• provide all the necessary supporting documentation to substantiate your case.
Categories Covered Under VAT Administrative Exception:
VAT Administrative Exceptions span across various categories, each catering to unique situations:
1. Tax Invoices:
A registrant can request exceptions for tax invoices, such as not mentioning particular details outlined in Article 59 of the Executive Regulation or not being required to issue tax invoices in certain cases. To qualify, sufficient records should be available to establish supply particulars, and it must be impractical for the registrant to issue a tax invoice.
2. Tax Credit Notes:
Registrants may request exceptions related to tax credit notes, similar to tax invoices. Sufficient records should be in place to establish supply particulars, and issuing a tax credit note should be deemed impractical.
3. Length of the Tax Period:
Registrants can apply to change the length of their tax period. The reason for requesting a change in the tax period's length must be provided.
The request should be accompanied by reasons for the stagger change.
4. Stagger:
Registrants on quarterly filing schedules can request changes in their stagger, aligning it with their preferred month for the tax period's end.
5. Evidence for Export of Goods:
Registrants can seek approval from the FTA to use alternative evidence for proving the export of goods.
The FTA may specify alternative evidence based on the nature of the export or the goods being exported.
A detailed rationale for using alternative evidence and the proposed alternative evidence itself must be provided.
6. Time for the Export of Goods:
Registrants can request an extension of time to export goods outside the UAE.
The FTA can extend the standard 90-day export period if certain circumstances apply.
A clear explanation of why an extension is needed, along with supporting documentation, should be presented.
How to Make a Request:
• A detailed description of why you're seeking a VAT Administrative Exception, adhering to the outlined criteria.
• A supporting letter with background information and facts supporting your request.
• Any supporting documents required to justify your request based on the exception category.
Navigating VAT regulations can be complex, but VAT Administrative Exceptions can offer some relief when facing exceptional circumstances. If you need more guidance or have questions, don't hesitate to reach out to us at finance@hicuae.com
