Introduction
Dubai Executive Council Decision No. 101/2024, issued on December 10, 2024, introduces a detailed framework for administrative violations and fines targeting foreign banks operating within the Emirate of Dubai. This regulation complements Dubai's existing legal structure and aims to enhance regulatory compliance, transparency, and accountability in the financial sector.
Key Provisions
- Approval of Violations and Fines
The decision approves a list of administrative violations and their corresponding fines. Notable features include:
- Incremental Penalties: If the same violation is repeated within two years, fines are doubled, with a maximum cap of AED 1,000,000.
- Categories of Violations: These range from failure to submit tax returns on time to providing falsified documents or non-compliance with regulatory instructions.
- Incremental Penalties: If the same violation is repeated within two years, fines are doubled, with a maximum cap of AED 1,000,000.
- Transfer of Fines
All fines collected under this decision are to be directed to the Public Treasury of the Dubai Government. - Enforcement and Publication
The decision was published in the Official Gazette (Issue No. 695, dated December 27, 2024) and took effect upon its publication.
Table of Administrative Violations and Fines
|
Violation Description |
Fine (AED) |
|
Failure to submit tax returns or required documents within deadlines |
1,000 per day of delay |
|
Providing falsified or non-conforming documents |
20,000 for every falsified or non-conforming document |
|
Delay in submitting the voluntary declaration when (i) the taxable person's tax return underreports the amount of tax due or (ii) the taxable person’s tax assessment is less than the tax that shall be paid; or when the declaration is submitted during a tax audit in either case. |
10% of tax difference resulting from audit (max. 500,000) |
|
Failure to update address or contact information |
20,000 |
|
Failure to notify suspension of banking operations in Dubai |
20,000 |
|
Non-compliance with regulatory instructions, decisions and directions |
10,000 |
Conclusion
The introduction of stringent penalties underscores Dubai’s dedication to upholding regulatory standards, fostering a robust and transparent financial environment. Foreign banks operating in the Emirate are urged to prioritize compliance by maintaining accurate tax practices, regularly updating operational details, and adhering to directives issued by the relevant authorities. Dubai Executive Council Decision No. 101/2024 reaffirms the city’s commitment to a well-regulated financial sector, and foreign banks must align their practices with this framework to mitigate risks and avoid substantial fines.
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