D84. Which Transfer Pricing Method is the most reliable? 

Clause 5 of Article 34 of the Corporate Tax Law states, the choice and application of a transfer pricing method or combination of transfer pricing methods (under Clause 3 or 4 of Article 34) must be made having regard to the most reliable transfer pricing method and taking into account following factors:  

1. The contractual terms of the transaction or arrangement.  
2. The characteristics of the transaction or arrangement.  
3. The economic circumstances in which the transaction or arrangement is conducted.  
4. The functions performed, assets employed, and risks assumed by the Related Parties entering into the transaction or arrangement.  
5. The business strategies employed by the Related Parties entering into the transaction or arrangement.

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 showcases UAE Tax system development at BRITACOF

His Excellency Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), Vice President of the Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF), underlined the remarkable achievements it has made over the past four years since the launch of its first edition in 2019.

H.E. noted that the BRITACOF managed to play an effective role in increasing cooperation in the tax sector, and raising the level of coordination between the countries covered by the Belt and Road Initiative (BRI).

The FTA Director General headed a delegation from the UAE to the fourth BRITACOF conference, held over three days in Tbilisi, Georgia, under the theme ‘Improving Tax Environment’, recording notable international participation.

The delegation from the Authority included Sara AlHabshi, Executive Director of Tax Affairs Sector, and Saida Kaddoumi-Osman, Acting Director of the Tax Policy and International Relations Department. The conference was also attended by H.E. Ahmad Ibrahim Al Nuaimi, Ambassador of the UAE to Georgia. Read more..

Federal Tax Authority Renews Call for PJSCs and PSCs to Register for Corporate Tax, in particular those whose financial year started on 1 June

The Federal Tax Authority (FTA) has renewed its invitation for Public Joint Stock Companies (PJSCs), PriVATe Shareholding Companies (PSCs), limited liabilities companies and priVATe companies resident in the UAE to register for Corporate Tax, in accordance with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (“Corporate Tax Law”) which applies to financial years beginning on or after 1 June 2023.

The FTA emphasized the importance of prompt registration for corporate tax especially for the above companies and juridical persons with taxable income whose financial year started on 1 June 2023.

In January 2023, the FTA announced registration for Corporate Tax through the EmaraTax portal and invited specific categories of Taxable Persons to register. In May 2023, the FTA opened Corporate Tax registration for Public Joint Stock Companies and PriVATe Shareholding Companies resident in the UAE. The FTA affirmed that it would provide taxpayers with sufficient time to complete registration and meet their legal obligations while giving priority to Taxable Persons whose financial year started on 1 June 2023, as part of the FTA's strategy to ease the registration process. Read more..

Federal Tax Authority launches new series of events to promote tax awareness among school and university students

The Federal Tax Authority (FTA) has launched a new series of events, including a set of specialised educational workshops, to promote tax awareness among school and university students as part of its comprehensive awareness campaign for this key sector.

The events are scheduled to coincide with the start of the 2023/2024 academic year and aim to enhance student awareness about the basics and importance of the tax system.

The Authority explained that the campaign’s activities are organised in collaboration with the relevant educational institutions in the government, semi-government, and priVATe sectors. It aims to enhance tax awareness among students – the future leaders and entrepreneurs – providing them with clear information to help them form a comprehensive understanding of the basics, objectives, and procedures of the tax system, which has become a fundamental part of the UAE community’s everyday life.

The first workshop of the campaign was held in the first week of academic year 2023/2024 at Al Mawakeb PriVATe School in Al Barsha, Dubai. During this workshop, His Excellency Khalid Ali Al Bastani, Director-General of the Federal Tax Authority, congratulated the students on the new academic year, wishing them success in their educational journey. Read more..

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.

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