Administrative penalties imposed usually by government bodies for breaching terms of an agreement, such as doing something unlawful or breaching statutory obligations, are not related to the supply of goods and services and therefore are not taxable. \"When a fine or penalty is imposed by a government authority for an unlawful act – for example, a speeding fine or incorrect parking fine – the purpose is to punish the person and the party imposing the penalty is not making any supply in respect of the payment,\" the FTA said. \"Therefore, no VAT is due on such fines and penalties.\"","publisher":{"@type":"Organization","name":"The National","url":"https://www.thenationalnews.com","logo":{"@type":"ImageObject","url":"https://www.thenationalnews.com/pf/resources/images/logo_rectangle.png?d=280"}},"articleSection":"Economy","keywords":["United Arab Emirates","Federal Tax Authority","Khalid Ali Al Bustani","Economy","Business","Article"],"description":"Federal Tax Authority issues public clarification statements to raise taxpayers awareness","thumbnailUrl":"https://thenational-the-national-prod.cdn.arcpublishing.com/resizer/jt_V9T8MW0c3RSPCCRDDB4Mn4oE=/400x267/filters:format(jpg):quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/Y5V76C3KM4RKZFYWXBLVWX6S5U.jpg","mainEntityOfPage":{"@type":"WebPage","@id":"https://www.thenationalnews.com/business/economy/compensation-payments-are-not-subject-to-vat-the-federal-tax-authority-says-1.780575"}}