VAT News

UAE-Release of federal law on tax procedures

As the planned implementation date of 1 January 2018 draws ever closer, the UAE authorities have released details of Federal Law No. (7) of 2017 on tax procedures. This law gives businesses a further idea of how the VAT system will operate once it comes into force.

Some of the key points contained in the law are as follows:

-Books and records must be maintained for a time period to be confirmed in the regulations 

-VAT returns must be submitted in Arabic, but the tax authority may also accept data, information, correspondence etc. in other languages with an Arabic translation 

-Any amendment to the tax record of a business must be made within 20 days, as must notification of a tax agent/representative being appointed 

-When paying tax, businesses must specify the tax and period so that it is properly allocated. If tax is overpaid this is carried forward unless a refund is requested 

-If errors are made on VAT returns, a voluntary disclosure must be made within a period of time to be confirmed. No thresholds exist whereby amendments can be made upon the return (unlike the UK) 

-Only tax agents listed on the official register and licensed may be appointed 

-Tax authorities must give 5 days notice of an audit, unless evasion, fraud etc. In this instance a premises can be closed for a period up to 72 hrs 

-Any penalties will be notified to taxpayers within 5 days 

-Monetary penalties may be a maximum of 5 times the VAT evaded 

-Decision appeals by taxpayers must be made within 20 days 

-If a refund application is made, this will be set-off against any other taxes/penalties first prior to repayment 

-Statute of limitation period is 5 years except for evasion where it is 15 and also where there is a failure to register in which case it is 15

 

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