New Tax Law in the UAE

5th August 2017

The UAE's new Tax Procedures Law, Federal Law No. 7 of 2017, was published on Monday 31st July 2017, and will come into effect 30 days after it's publication in the Official Gazette. It defines the regulations for the collection of taxes, penalties for non-compliance and the role of the Federal Tax Authority (FTA) which was established in October 2016 under Federal Law No. 13 of 2016.

What does the new Tax Procedures Law cover?

Tax Obligations - record keeping; tax registration; tax returns preparation; submissions; payments & voluntary disclosure
Tax Procedures - notifications & tax agents
Tax Audits - rights of the FTA to perform audits and access records; rights of the person/organisation being audited; notification of results; administrative penalties & tax evasion penalties
Objections - procedures for appeals & the role and procedures of the Tax Disputes Resolution Committee
Refund and Collection of Tax - refund procedures
General Provisions including: confidentiality, time frames, time limits & conflicts of interest.

What do UAE businesses need to do to stay compliant?

Register with the relevant authority for tax
Maintain accounting and tax records
Tax returns to be submitted in Arabic
Inform the FTA of any amendments of information within 20 business days of the occurrence
Submit returns in accordance with the provisions of this Law and the Tax Law
Pay the tax within the time frames specified

What are the penalties for non-compliance?

Administrative penalties will be a minimum of AED500 and will not exceed three times the amount of tax in repesect of which the penalty was levied.
Tax evasion penalties will incur a prison sentence and financial penalty not exceeding five times the amount of evaded tax.
It should be noted that tax assessments can be conducted up to five years after a certain tax period. In the case of tax evasion, assessments can be conducted up to 15 years from the end of the tax evasion period.

The above information is purely intended as an overview and does not constitute legal advice. It is strongly recommended that professional advice and assistance is sought from tax specialists in relation to your specific business.

Written by Jenny Hunt, Founding Partner & CEO

Gateway Group Of Companies, Abu Dhabi & Dubai UAE