Legislation to establish the UAE’s tax system has been made public.
President of the UAE, His Highness Sheikh Khalifa bin Zayed Al Nahyan, announced the Tax Procedures Law, which comes with obligations for businesses regarding VAT and excise taxes and spells out the role of the Federal Tax Authority (FTA). There’s no mention of personal taxation and all the information that’s been given relates to companies.
As well as tax procedures, the law covers audits, objections, refunds, collection, and obligations – which include tax registration, tax-return preparation, submissions, payment and voluntary disclosure rules – as well as tax evasion and general provisions.
Key points include:
- The Law requires any person conducting any type of business to keep accounting records and commercial books, as well as any tax-related information as determined by the Law.
- Tax returns, data, information, records and documents must be submitted to the Authority in Arabic. The FTA may accept documents in any other language, but that’ll be up to the business to translate at their own expense.
- Each taxable person must also prepare a tax return for each tax period and for each tax while being registered. They must submit the tax return to the Authority and pay any payable tax within a time limit.
- The Authority reserves the right to turn down any incomplete return and may perform a tax audits.
When the Tax Procedures Law goes into effect – and we don’t have a definite date for that – all UAE-based businesses will need to keep accurate records for five years.
His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and FTA Chairman, said: “The Tax Procedures Law is a significant milestone towards establishing the UAE’s tax system and diversifying the economy.”
For anyone who is interested, the full text of the Tax Procedures Law is available on the Ministry of Finance’s website at www.mof.gov.ae