Cabinet Decision No. (74) of 2023 on the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures (New Executive Regulation) was issued, which revoked Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures and its amendments (Old Executive Regulation). The New Executive Regulation is effective from 1 August 2023. We have provided a detailed explanation, basis our understanding of the literal translation of the relevant amendment in the table below:
Article No. | Heading | Amendment | Nexdigm Comments |
1 | Definition | A new definition has been provided for assets. The term "assets" has been expanded to include intangible assets such as patents, brands, licenses, trademarks, computer programs, copyrights, goodwill and customer lists. | The expansion in the scope shall have significance while interpreting the meaning of "asset" in the context of Article 18 of the New Executive Regulation, which speaks about the Authority of the Auditor to Seizure and Retain of Documents and Assets. |
2 | Accounting records and commercial books | It is now mandatory to keep records supporting the entries in the accounting records and commercial books, such as invoices, contracts, correspondence and documents containing details of tax positions and tax calculation methods. | The introduction of new record-keeping requirements is a welcome move for aligning the requirements considering the introduction of Corporate Tax. |
3 | Period of record keeping | The amendment prescribes a period for which all
accounting records, commercial books and documents are to be
maintained:
|
The Authority adopted the move to empower FTA to conduct audits without any drawbacks in cases where Voluntary Disclosure is filled in 5th year. It also relaxes taxpayers as the retention period is reduced for real estate documents. |
5 | Language | Under the New Executive Regulation, the FTA may now accept tax returns, information, records, and any other documents related to tax to be submitted in English and may request some or whole to be translated to Arabic. | The said move is beneficial to the taxpayer as this will reduce the procedural requirement. |
6 | Procedures relating to Tax Registration, Deregistration and Amending Details of Registration | According to this amendment:
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FTA has initiated this step to ensure that there is an update available with regard to the changes and reduction in fake registration. |
11 | Means of Notification | FTA can now notify a person through post, text messages on mobile phones, notifications through smart applications and through the FTA's electronic systems. | The taxpayers should diligently keep track of notifications to avoid any delay in response or penalty. |
12 | Tax Agents |
|
This amendment will extend the scope for registration as Tax Agent, and more tax professionals can reap the benefits by becoming tax agents. |
13 | Procedures for Tax Agent Listing and Delisting in the Register | Every judicial tax agent is required to renew their registration every year. | |
22 | Procedures and Measures |
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Taxpayers need to be mindful while making the import and determining the duty rates payable. |
23-24 | Reconciliation process - Tax Evasion crimes |
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The ambiguity in relation to criminal proceedings against taxpayers is set aside by the introduction of proper procedures by the FTA. |
25 | Extension of deadlines |
|
FTA has increased its scope of assessment by clarifying the scope of extension of deadlines. |
27 | Bankruptcy | The FTA shall, within 20 business days after being notified of the trustee's appointment, notify them of the amount of the due tax in respect of the business subject to bankruptcy and, where applicable, of its intention to perform a tax audit for the specific tax period(s). | The time limit for notifying the taxpayer has been specifically clarified. This is a welcome move as this shall benefit taxpayers in restricting their liability. |
Our
Comments
The amendment to Tax Procedures, which has come into effect from
1 August 2023, along with Public Clarification issued in said regard,
provides the changes that are required to be undertaken in which
businesses are functioning at present.
Accordingly, to avoid penal consequences, businesses are advised to ensure that changes required in carrying out business in the UAE are carried out. |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.