Posted on Dec 01, 2017
Value Added Tax (VAT) is currently the most widely recognized form of consumption tax system used around the world. In spite of the fact that the principles of the tax are broadly the same everywhere, the rules can be enacted and implemented differently in different countries so that the compliance burden on business varies considerably. The UAE had reported its goalto the introduce value added tax (VAT) in the country starting January 1, 2018. The issuance of the final tax law has set the stage for implementation of VAT and meeting the implementation deadline.
The Law characterizes the role, respective rights and obligations of Federal Tax Authority and the taxpayercommitments under tax compliance. The Law defines a clear set of common procedures, rules and regulations to be followed and applied to all tax laws in the UAE (VAT, Excise). This new Law also covers tax procedures, audits, objections, refunds, collection, and obligations - which include tax registration, tax-return preparation, submissions, payment and voluntary disclosure rules - in addition to tax evasion and general provisions.
When the Tax Procedures Law becomes effective, all UAE-based organizations will be required to keep precise records for at least 5 years. The law additionally sets punishments for non-compliance, and also clear procedures for appeals which line up with worldwide accepted procedures, which provides a fair and transparent condition for the FTA to do its command.
Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and FTA Chairman stated that, "The Tax Procedures Law is a significant milestone towards establishing the UAE's tax system and diversifying the economy.”
The President His Highness Sheikh Khalifa bin Zayed Al Nahyan issued all-encompassing legislative framework that lays the groundwork for the UAE's plan to implement taxes as a means to ensure sustainability and diversify the government's revenue streams. The increased resources will enable the Government to maintain the momentum of its development and infrastructure for a better future.
"The UAE is committed to meeting the most stringent international standards," Sheikh Hamdan bin Rashid said.
Registrants must incorporate their Tax Registration Number (TRN), in all correspondence and exchanges with the authority or with others. They must also inform the authoritywithin 20 working days of the occurrence of said circumstance by filling the form of any circumstance that might require the amendment of information related to their tax record.
Each assessable individual should also prepare the Tax Return for each Tax Period and for each Tax while being registered. Should also submit all tax related returns and forms with the authority within the prescribed limit of time where authority should also use its right to turn down any incomplete and erroneous return.
The law commands that a register of tax agents be set up at the authority, which will hold records for every agent/operator reporting his/her lead. It isn't allowed for any individual to ractise the profession of a tax agent in the UAE unless he/she is enlisted in the list.