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Tax Consultants & Bookkeepers in the UAE

        

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Federal Tax Authority sets 31 December 2022 as deadline to apply for Re-determination of Administrative Penalties on Taxes

The Federal Tax Authority (FTA) has called on registered taxpayers to benefit from the Decision to Re-determine Administrative Penalties on taxes to be worth 30% of the total outstanding amount of penalties that were not paid before 28 June 2021, and to ensure they meet the conditions set out in the Cabinet Decision on re-determining administrative penalties imposed on tax law violations in the UAE.

The FTA stressed that taxpayers who are eligible to benefit from the Decision must complete all related procedures through the e-services portal on its official website before 31 December 2022 to be able to benefit from these facilities.

In a press statement issued today, the Authority explained that according to the relevant Cabinet Decision, which went into effect on 1 January 2022, tax registrants who were unable to meet the criteria for benefiting from the re-determination by 21 December 2021 will be able to apply for re-determining administrative penalties to be equal to 30% of the total outstanding fines by fulfilling the necessary conditions no later than 31 December 2022. Read more..

Corporate Tax News and F.A.Q's

New corporate tax in UAE: Will it apply to your personal income?

The UAE's Ministry of Finance on Monday announced the introduction of federal corporate tax on business profits for organisations that begin their first financial year on or after June 1, 2023.

Here are some of the important takeaways from the announcement by the Federal Tax Authorities:

Who will the new tax apply to?
The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.

Are there any exemptions?
A 0% tax rate will be applicable on taxable profits up to Dh375,000, in an attempt to support small businesses and startups. Read more...

Expert VAT Opinions

B31) I paid on time, but forgot to file my return. Can I avoid late fees?

The mistake means a Dh1,000 fee plus interest is owed to the Federal Tax Authority.

The quarterly VAT return process has two parts. First, you must complete and submit the VAT return online in the Federal Tax Authority’s Portal and secondly make the required VAT payment, which can be done through various channels, including e-dirham, visa or debit cards, bank transfer or through UAE Exchange. 

The FTA legislation explains that making a payment is not recognised until the corresponding VAT return has been filed. Therefore, despite making the payment in full and the funds reflected on your FTA account, the FTA don’t recognise that payment against your missing VAT return. Read more...

FTA Press Releases

The UAE Federal Tax Authority is launching EmaraTax on 5 December 2022

Further to the announcements by the Federal Tax Authority during the past weeks, the Federal Tax Authority confirmed its intention to launch the EmaraTax platform on 5th December 2022.

The migration to EmaraTax will commence from the end of day on Wednesday 30 November. EmaraTax will be available for use on 5 December.

To minimize disruption to taxpayers the FTA has planned this migration to EmaraTax to coincide with the National Day holiday and well in advance of the usual tax return submission and payment dates.

EmaraTax significantly enhances the way that taxpayers can access the FTA’s services, pay their taxes and obtain refunds. The new online platform also greatly enhances the ability of the FTA to administer taxes in the UAE, enables better, faster decision-making and earlier engagement with taxpayers that need support.

The new online platform aligns with the UAE Digital Government Strategy 2025 and the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, Ruler of Dubai, to leverage emerging technologies and build a solid digital infrastructure that serves the people and business community of the UAE. Read more..

Federal Tax Authority refunds tax incurred on building and operating mosques

The Federal Tax Authority (FTA) has launched a mechanism for refunding value added tax (VAT) incurred on building and operating mosques on the FTA’s e-Services portal, in light of Cabinet Decision No. (82) of 2022 in that regard, which began to be implemented as of yesterday Saturday 29 October 2022, covering all mosques in the UAE, provided that the refund applications are submitted within time limits based on the completion date of the mosque’s construction.

In a press statement issued today, the FTA announced that it will begin accepting applications for refunding input tax incurred on building mosques as of Tuesday, 1 November 2022, via the FTA’s e-Services portal. Refund applications for the refund of tax incurred on operating mosques will be accepted at a later date on the same portal.

FTA’s Director General, His Excellency Khalid Ali Al Bustani emphasized on the importance of the decision, which is in line with the wise leadership’s directives to encourage charity work and public benefit activities that are practiced in accordance with the legislation in force in the UAE. Read more..

Federal Tax Authority showcases its latest digital initiatives at GITEX Global 2022

The Federal Tax Authority (FTA) will be showcasing its latest digital initiatives at the 42nd GITEX Global 2022, which is set to be held over five days starting from Monday, 10 October, at the Dubai World Trade Centre with more than 5,000 companies joining from over 90 countries.

In a press statement issued today, the Authority revealed that its participation at GITEX will highlight its latest digital initiatives, launched as part of the continuous development plans it carries out in accordance with the best standards. The initiatives are in line with the UAE Digital Government Strategy, designed to drive the smart transformation of all services, and introduce seamless and proactive digital services. The objective is to provide innoVATive models that embody the leadership and excellence of the government systems, and strengthen efforts to meet taxpayers’ aspirations and process their transactions quickly and efficiently.

FTA Director General His Excellency Khalid Ali Al Bustani said: “Through its participation at GITEX , the world’s largest tech event, the Federal Tax Authority aims to achieve two main objectives. The first is to introduce the FTA’s experts to the latest technologies and smart digital systems in the field of tax administration, which can be built upon to ensure the continuous development and modernisation of the FTA’s services. This, in turn, supports our efforts to fulfil the directives of our wise leadership and make the UAE one of the best countries in the world, safeguarding the Emirates’ advanced competitive position – all in line with the ‘Principles of the 50’, which act as a reference for all activities in the government sector moving forward.” Read more..

Maintenance of Financial records under VAT

As per Decree-Law, all businesses in the UAE need to record their financial transactions and ensure that their financial records are accurate and up to date. The final responsibility and accountability to comply with VAT is on the business.

Accounting Records and Commercial Books

As per Executive Regulations of Federal Law No. (7) on Tax procedures, Accounting Records and Commercial Books shall include the following:

  • Accounting books in relation to that Business, which include records of payments and receipts, purchases and sales, revenues and expenditures, as required under any Tax Law or any other applicable law, including:
    • Balance sheet and profit and loss accounts.
    • Records of wages and salaries.
    • Records of fixed assets.
    • Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.

Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case the authorities need to establish whether they should be registered.

Contact Finance Works to maintain your books and records and implement financial systems that are VAT ready and compliant.

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