The process of tax dispute litigation in the United Arab Emirates (UAE) describes the legal framework that allows taxpayers to challenge decisions made by the Federal Tax Authority (FTA). This article helps to explore the essential steps required to manage tax disputes in the UAE.
Taxpayers disagree with a decision or assessment of the FTA; the first step is to submit an application for reconsideration. If the outcome of the reconsideration is not favorable to the taxpayer, the taxpayer may appeal further to TDRC and appellate Courts.
Tax Dispute Litigation Process in the UAE
- Settling Tax and Penalties
VAT is an oblique tax in the UAE primarily based on the price of products or offerings. Taxpayers must decide and declare the tax amount due or refunded every duration. If disputing an FTA selection, it’s strongly encouraged to pay tax and a 50% penalty to avoid additional consequences. This stops consequences from amassing all through the dispute.
- Application for Reconsideration
Taxpayers can submit an ‘Application for Reconsideration’ immediately to the FTA if they disagree with a decision, provided it’s far filed within forty commercial enterprise days of the choice along with info and proof to help reconsideration.
- Objecting to the Tax Dispute Resolution Committee (TDRC)
If the dispute is unresolved after reconsideration, taxpayers can object to the relevant TDRC. Key necessities include settlement of all tax and penalties, prior reconsideration application, and objecting within 20 business days.
Table 1: Relevant TDRC by taxpayer location
| Taxpayer Location | Relevant TDRC |
| Emirate of Dubai | Dubai TDRC |
| Emirate of Abu Dhabi and non-UAE addresses | Abu Dhabi TDRC |
| Emirates of Sharjah, Ras al-Khaimah, Ajman, Fujairah or Umm al-Quwain | Sharjah TDRC |
The objection documentation needs to be submitted to the TDRC in Arabic, inclusive of an explanatory memorandum and all supporting documents. It is usually recommended to have interaction with UAE tax and litigation specialists to assist with the objection documentation.
- Decision of Tax Dispute Resolution Committee
The TDRC needs to determine within forty commercial enterprise days, extendable to 45 days (about 1 and a half months). Moreover, decisions below AED100,000 are final, whereas for disputes over AED100,000, the decision can be appealed to the Federal Court of First Instance within 40 enterprise days.
- Appeal to the tax dispute, adalah
In the UAE, tax disputes and consequences over AED100,000 can be appealed to the Federal Court of First Instance within 20 commercial enterprise days. The court will appoint tax experts to assess the attraction, and if parties are still disillusioned, they can refer the case to the Federal Court of Appeal. However, the appeals can take over a year, especially if it is going through higher courts, leading to extra expenses. Due to the technical nature of tax litigation, it’s important for appellants to preserve certified UAE tax and litigation lawyers to recognize and navigate the legal methods and argue tax subjects before the courts.
- Non-TDRC Tax Disputes
Tax disputes inside the UAE can stand up in agreement among members of the family among taxpayers regarding the proper accounting remedy of taxes. If the case does not fall below the jurisdiction of the Tax Disputes Resolution Committee (TDRC), the involved party must report for civil litigation in the respective emirate’s courts. Courts frequently employ expert advisors to help clear up tax troubles, and parties might also want guidance from a dubai company tax consultant and suggestions due to the technical nature of the matters. Decisions can be appealed to the Court of Appeal and, in the long run, to the Court of Cassation. Tax expertise is critical for correctly navigating those contractual tax disputes in the UAE.
Settlement with Federal Tax Authority
To settle tax disputes and litigation in the UAE, corporations require technical tax understanding and skilled litigation support, for which key stakeholders include taxpayers, tax sellers, tax legal professionals, and advisers. Moreover, to settle the fee with FTA, the subsequent techniques must be considered:
Table 1: Payment Methods for Settlement with FTA
| Payment Method | Description |
| Credit Card | Attracts a 2-3% fee on total amount. |
| Bank Transfer | Most effective but challenges transferring funds internationally. |
Seek the Expert Services of Top Tax Consultants in the UAE
To conclude, an intensive comprehension of the tax dispute litigation technique within the UAE facilitates taxpayers to manipulate tax disputes successfully. Taxpayers can therefore be searching for the professional services of Top Tax Consultants in UAE to seamlessly navigate through the process of tax dispute resolution.
Thus, contact us today , and we shall be satisfied to help.
FAQs
What is the first step in a tax dispute in Dubai?
File a formal objection with the Federal Tax Authority (FTA) within 20 business days of the tax assessment notice.
How long does it take to resolve a tax dispute in Dubai?
Resolution times vary but typically range from a few months to over a year, depending on the complexity of the case.
Can you appeal the FTA’s decision in Dubai?
Yes, you can appeal to the Tax Disputes Resolution Committee or the courts if you disagree with the FTA’s decision.
What are the costs associated with tax dispute litigation in Dubai?
Costs include administrative fees, legal representation, and potential penalties or interest on the disputed amount.
