The Federal Tax Authority has recently issued guidance for Whistleblowers to report Tax Transgressions to the FTA.

Key Highlights are as below:

Whistleblowing

Whistleblowing is generally referred to the activity of reporting evasions of Laws and Regulations to an authority. The whistle blower is generally given immunity from retaliation and a monetary reward as well.

Significance of whistleblowing

The purpose of whistleblowing is to ensure that individuals and businesses comply with all the tax laws, avoiding all misconducts including tax evasion and the ones not complying face prosecution or penalties. This satisfies the tax society with a sense that compliance with the tax legislation is better than non-compliance or evasion which could be detected by FTA in several ways.

Informants

An informant is any natural person who informs the FTA of any Tax malpractices and Non- Compliances with Tax Regulations.

Leads eligible for the whistleblowing

Suspected tax evasion: This includes but not limited to false information in tax returns or a taxable person evading registering for tax.

Suspected non-compliance with tax Regulations: This includes but not limited to non-issuance of tax invoices, correct amounts not mentioned, non-collection of tax, or offering to charge a lower price (exclusive of VAT) if the recipient is willing to pay cash without receiving a tax invoice.

Confidentiality

The FTA will entertain anonymous lead submissions to efficiently validate the leads. The informants need not worry about the confidentiality of their information as these details will remain confidential and protected by FTA. These details will not be used in legal proceedings against the reported person.

The informant will be required to sign a non-disclosure agreement (NDA) during the submission of the lead to safeguard the confidential/sensitive information, which includes information on monetary rewards (if any).

The whistle blowers will not be entertained by the FTA regarding status update or pending investigation on the lead once the lead is submitted to the FTA.

Monetary rewards and eligibility

THE FTA will pay Monetary rewards to informants to encourage all the members of the society to report non-compliant business. The amount of monetary rewards will be proportional to the taxes collected by FTA as a result of the information and submitted lead. After the matter is investigated and the FTA has recovered the due Tax from the reported person, the eligible informants of the monetary reward will be notified by FTA and the amount will be transferred to their bank accounts.

The following Natural Persons are not categorized as ’Informants’ and hence they are not eligible for Monetary rewards from FTA, in order to avoid all the possible conflicts of interest.

FTA employees and their families up to the 4th degree of consanguinity (degree or relationship), which includes great-great-grandparents, great-great grandchildren, nieces and nephews, for example; as well as other persons who got information through their position in or links with the FTA, are not considered as ‘’informants’’ for the purposes of monetary rewards. The term Consanguinity refers to the number of steps calculated between generations that separate one person from a common ancestor and then counting the generations to the other person.

The eligibility for monetary rewards for ‘Informants’ is based upon the minimum fulfilment of the below conditions:

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• The provided information is credible, accurate, and has not been obtained previously by the FTA;

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• Whistleblowing form filled accurately, completely and sufficiently;

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• Taxable amounts collected by FTA are more than AED 50,000;

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• All forms of objections and appeals are exhausted by the reported person.

Steps to apply for whistleblowing

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• On the FTA’s website, navigate to the left menu-bar, and click on the RAQEEB icon;

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• Click on START SERVICE option;

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• Click on ACCEPT to accept the non-disclosure agreement displayed as a pop-up box, after which whistle blower will be redirected to the Whistleblowing Form to complete the required information.

Review of Application

After the submission of the form, the FTA will evaluate the lead and decide to either close it or continue to audit the case, based on the information provided by the informant. The FTA may request further information from the informant regarding the case where the informant will receive an e-mail from the FTA, anonymously notifying them of the need to access the FTA’s portal for further action.

Rewards Process

An ‘Informant’ will be eligible for ‘Monetary Reward’ will receive an e-mail notification from the FTA. The informant can provide their ID proofs and Bank details for receiving the reward.

Please note that this memo is for information purposes only and should not be construed as an advice. It does not necessarily cover every aspect of the
topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.

If you would like to discuss Tax & VAT services, please drop us an email at info@premier-brains.com or call us at + 971 4 3542959.

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