Dubai court orders Dh723,500 refund in fake tax official scam

Dubai: A Dubai court has ordered two men to jointly repay Dh723,500 to a company and its manager after they were found guilty of impersonating Federal Tax Authority employees and defrauding the victims through forged documents. The court also imposed 5 per cent annual legal interest from the date the judgment becomes final until full settlement, along with court fees and Dh1,000 in legal costs. A separate claim for Dh12 million in compensation was rejected for lack of evidence and causation.

The ruling, issued by the Dubai Court of First Instance, follows a related criminal conviction for fraud, forgery and use of forged documents.

According to case details, the defendants contacted the manager of a company owned by the first claimant, falsely claiming to be Federal Tax Authority officials. They shared confidential company information and presented forged documents indicating that tax reconsideration requests had been approved and that liabilities had been cleared. They also claimed they could settle or reduce tax obligations through official procedures. 

Trusting their claims, the manager transferred Dh723,500 to them. 

The court found that the defendants used forged state seals, the Federal Tax Authority stamp and a fake employee signature. They also accessed the company’s tax system and submitted a false declaration showing a negative taxable amount equal to outstanding liabilities, effectively attempting to reduce dues to zero.

The fraudulent filing triggered major reassessments and penalties, with total tax exposure estimated at around Dh13 million, including Dh1.08 million in existing dues and Dh4.9 million in late-payment penalties. The company also suffered operational disruption, including freezing of its trade licence, bank accounts, vehicles and assets, which halted its business activities and affected obligations to staff, clients and suppliers.

In the criminal case, the defendants were sentenced to six months in jail, fined Dh723,500 jointly, ordered to surrender the forged documents and deported. The ruling was upheld by the Court of Appeal and the Court of Cassation, making it final and enforceable.

The civil court held that the criminal judgment was binding on the existence of the offence and the liability of the defendants. It ordered repayment of Dh723,500 with interest and costs.

However, it rejected the Dh12 million damages claim, stating that civil liability requires proof of fault, damage and causation. The court had appointed a tax and accounting expert panel, but the claimants failed to pay the Dh60,000 expert fee despite being given sufficient time, preventing the assessment from proceeding.

The court ruled that, without expert evidence or supporting documentation, the claimed losses remained unproven, bringing the dispute to a close while limiting recovery to the fraudulently obtained amount.