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UAE Whistleblower Programme for Tax Violations and Evasion: Complete Guide
The UAE Whistleblower Programme for Tax Violations and Evasion provides a mechanism for reporting suspected tax violations and non-compliance to the Federal Tax Authority (FTA). The programme allows individuals to submit credible information about natural or juridical persons who may be involved in illegal tax activities or who have failed to meet their tax obligations.
The programme was introduced under a decision of the UAE Cabinet of Ministers and enables the FTA to receive and process information related to potential non-compliance with UAE tax legislation. Under specific conditions, eligible informants may also receive a monetary reward based on the tax collected as a result of the information provided.
What Is Whistleblowing in the UAE Tax System?
Whistleblowing refers to the process through which an individual provides information to the FTA about suspected tax violations, tax evasion, or failure to comply with tax obligations.
The person providing the information is referred to as an “informant.” An informant can report a natural person or a juridical person, including an organisation, entity, or company, where there is information suggesting that tax laws or obligations may not have been properly followed.
The purpose of the programme is to help the FTA identify potential tax non-compliance and take appropriate action where sufficient evidence supports the information received.
Who Is an Informant?
An informant is a person who provides information to the FTA about a natural or juridical person that may:
- Be conducting illegal activities relating to tax; or
- Have failed to fulfil its tax obligations.
The programme therefore provides a formal channel through which relevant information can be brought to the attention of the FTA.
However, simply submitting an allegation does not automatically mean that it will qualify as a credible lead or result in a monetary reward. The information must meet the applicable requirements and be supported by appropriate evidence.
What Types of Tax Violations Can Be Reported?
The programme covers information relating to suspected tax evasion and non-compliance with tax laws and procedures.
Examples of potentially reportable activities include:
1. Suspected Tax Evasion
An informant may provide information about suspected tax evasion, including situations where:
- A registrant is suspected of providing false information in tax returns. or
- A taxable person is suspected of avoiding tax registration.
Such information can help the FTA identify potential cases requiring further examination.
2. Failure to Comply With Tax Procedures
The programme also covers suspected non-compliance with tax laws and procedures.
Examples mentioned in the programme include:
- Failure to issue tax invoices
- Issuing tax invoices that do not contain the correct amounts
- Failure to collect tax
- Offering customers a lower price excluding VAT when they agree to pay cash without receiving a tax invoice
These activities may indicate potential tax non-compliance and can be reported through the whistleblowing mechanism.
Why Is Evidence Important for a Tax Whistleblower Report?
Providing an allegation alone may not be sufficient. For information submitted by an informant to be considered a lead, it must be supported by evidence.
The FTA may reject information that does not contain sufficient supporting documents or evidence because it may not be considered a credible lead. Where additional information is required, the FTA may contact the informant for further details.
Therefore, anyone considering submitting a report should focus on providing accurate, relevant, and properly supported information.
Is the Informant's Identity Confidential?
Confidentiality is an important part of the UAE Whistleblower Programme.
According to the programme information, the identity of the informant remains confidential and protected by the FTA. It is not disclosed to unauthorised personnel or to the natural or juridical person being reported.
The informant’s identity is also not disclosed in legal proceedings against the reported person, as stated in the programme material.
At the time of submitting the lead, the informant is also required to sign a non-disclosure agreement (NDA). This is intended to protect confidential or sensitive information, including information relating to any monetary reward that may be applicable.
What Is the Monetary Reward Under the UAE
Whistleblower Programme?
One of the notable features of the programme is the possibility of receiving a monetary reward.
The UAE Cabinet of Ministers has allowed the FTA to provide monetary rewards to eligible informants. The amount of the reward is directly proportionate to the amount of tax collected by the FTA as a result of the submitted information and lead.
The reward is not paid immediately after submitting a report. According to the programme information, the matter must first be investigated and the relevant tax must be collected from the reported person.
After these steps are completed, the FTA will notify an eligible informant about the monetary reward and deposit the reward into the informant’s bank account.
Who Can Qualify for a Monetary Reward?
Not every person who submits information will automatically qualify for a monetary reward.
The programme identifies minimum conditions that must be met. These include:
- The information provided must be credible and accurate and must not have been previously obtained by the FTA.
- The whistleblowing form must be completed accurately, completely, and sufficiently.
- The FTA must have collected more than AED 50,000 in tax as a result of the reported matter.
- The reported person must have exhausted all forms of objections and appeals.
These conditions demonstrate that a monetary reward depends on the outcome of the case and the satisfaction of the applicable requirements.
Who Is Excluded From Monetary Rewards?
The programme also specifies certain categories of people who are excluded from eligibility for monetary rewards.
These include:
- FTA employees and their relatives within the fourth degree of family relationship.
- Persons who obtained the information through their position in or connections with the FTA
- Tax agents
The exclusion of these categories helps define who can be considered an eligible informant for reward purposes.
UAE Whistleblower Programme: Key Points to Remember
For businesses and individuals dealing with UAE tax matters, several important points should be understood:
- The programme provides a mechanism for reporting suspected tax violations and tax evasion.
- An informant can report suspected non-compliance involving a natural or juridical person.
- Reports should contain supporting evidence to be considered credible.
- The FTA protects the confidentiality of the informant’s identity.
- Eligible informants may receive a monetary reward.
- The reward is linked to the tax amount collected by the FTA as a result of the information.
- The collected tax must exceed AED 50,000 for the monetary reward eligibility condition specified in the programme.
- Certain individuals, including FTA employees, certain relatives, persons obtaining information through connections with the FTA, and tax agents, are excluded from monetary reward eligibility
Conclusion
The UAE Whistleblower Programme for Tax Violations and Evasion provides the FTA with a structured mechanism to receive information about suspected tax evasion and other forms of tax non-compliance. It covers issues such as false information in tax returns, failure to register for tax, incorrect tax invoices, non-collection of tax, and certain VAT-related practices.
For an informant, the quality of the information and supporting evidence is particularly important. The programme also provides confidentiality protections and, where all specified conditions are satisfied, the possibility of a monetary reward based on the tax collected following the investigation.
Businesses should therefore maintain proper tax records, issue accurate tax invoices, comply with applicable tax obligations, and follow UAE tax laws and procedures. Where suspected violations are identified, the whistleblowing mechanism provides a formal route for bringing credible information to the attention of the FTA.
