New tax procedures law | KPMG | AE

New Tax Procedures Law lays groundwork for tax system and defines Tax Authority’s mandate

New tax procedures law

On 1 August 2017, the United Arab Emirates (UAE) Federal Tax Authority (FTA) issued the Federal Law No. (7) of 2017 on Tax Procedures (FLTP). This law applies to tax procedures related to the administration, collection and enforcement of Tax and the rights and obligations of the FTA, taxpayers and their agents.

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FLTP

The FLTP sets the foundation for the UAE tax system. Further laws are yet to be formulated to cover specific taxes such as the VAT and Excise Tax Laws. These laws are expected to be published in the near future with thE implementation date for VAT in the UAE still scheduled for 1 January 2018.

In brief, the FLTP:

  • Outlines a set of common procedures and rules to be applied to all tax laws in the UAE and so underpins the intended introduction of VAT and Excise Taxes
  • States the respective rights and obligations of the FTA and taxpayers;
  • Includes language and record keeping requirements
  • Details requirements for tax registration, completion and submission of returns and payments
  • Includes procedures for dealing with tax audits, errors and voluntary disclosures
  • Sets penalties for non-compliance, as well as procedures for appeals
  • Establishes the register of tax agents who may interact with the FTA on behalf of taxpayers, specifies the basic requirements for appointing the said tax agents, and sets the standards for maintaining confidentiality by the Authority as well as its officers

Furthermore, the FLTP sets out the requirement for any person conducting any type of business, to keep accounting records and commercial books, as well as any tax-related information. Currently, the statute of limitation has been set at five years unless cases of tax evasion or non-registration have been proven.

Although the FLTP sets out common procedures for registration and filing of tax returns, the detailed requirements of what information is necessary along with the registration application or should be included in a tax return are subject to the relevant law imposing that tax.

The full (unofficial English) text of the FTPL is available on the Ministry of Finance website: www.mof.gov.ae

What should you do?

The release of the FTLP is a further confirmation of the UAE’s firm intention to proceed with the introduction of Excise Taxes and Value Added Tax. Businesses must act now to ensure that they are prepared for the introduction of these new taxes.

Our VAT page contains more information of how VAT will impact your business and what steps you should be taking to prepare

Alternatively, please contact one of our VAT specialists to discuss your needs.
 

© 2017 KPMG, KPMG LLP and KPMG Lower Gulf Limited, registered in the UAE and member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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