Article 1 Definitions |
Article 1
Definitions |
Some of the definitions have been updated including, Legal
Representative and Tax Auditor. In addition, there are new definitions for Business Day, Tax Residency Certificate and
Tax Resident. |
Article 5
Language
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Article 5
– Language
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Article 5 covers language. There are some general changes to the wording of Article 5 and a new clause (3) has been added confirming that the person providing documents translated into Arabic will be responsible for the accuracy and validity of information, will bear all associated costs, and the FTA will be entitled to rely on such document |
Article 9
Allocating Payable Tax Upon Settlement
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Article 9
Determination of Payable Tax
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This Article deals with the allocation of payments made to the FTA. Some changes have been made to the wording to give the FTA additional rights to make allocations. |
Articles 12 to 15
Tax Agents
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Articles 12 to 16
Tax Agent
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These changes deal with Tax Agents. The principles applied to the appointment of agents remains largely the same but the Articles have been redrafted and a new Article 13 has been inserted to cover registration, suspension of registration and deregistration. |
Article 16
The Right of the Authority to Perform a Tax Audit
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Article 17
The right of the Authority to perform a Tax Audit
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This Article concerns Tax Audits. There have been some small changes to the wording and a new clause (2) has been added that provides that the FTA must give a notification at least ten days before the audit commences. Previously, this was five days. |
Article 23
Notification of the Tax Audit Results
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Article 24
Notification of the Tax Audit Results
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This Article deals with Tax Assessments. There have been general changes to the wording and in addition, clause (1) confirms the FTA must notify the Taxpayer within ten days of issuing certain types of assessment. |
Article 24
Administrative Penalties Assessment
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Article 25
Administrative Penalties Assessment
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This Article deals with Administrative Penalties Assessments. The amended Article confirms that administrative penalties can also be levied on tax agents and legal representatives. |
Articles 25,26,27
Penalties, Procedures and Measures
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Article 26
Penalties
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This part of the legislation applies to tax evasion. In the new Articles this is referred to (in the heading) as 'Tax Crimes'. The Articles have been rewritten and are much more detailed than before.
Important changes include a reduction in the maximum monetary penalty for certain crimes from five times the amount of tax evaded, to three times the amount.
In addition, prison sentences or a monetary penalty not exceeding AED 1,000,000 (or both) can be applied for certain violations. There are also new clauses dealing with general procedures and settlements in connection with tax evasion.
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Articles 28 to 37
Review of Assessment, Objection and Appeal
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Article 27 to 33
Objections
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These are provisions relating to the review of assessments, objections and appeals. Generally, the principles of these processes remain the same, however, the provisions have been significantly redrafted, updated and restructured.
A new clause (28) provides a right for the Taxpayer to request a review of a Tax Assessment and related penalties within 40 business days of notification, subject to certain conditions. Other significant changes include a new provision in Article 32 (3), that the Cabinet, at the suggestion of a Minister, may amend the amount of tax to be settled in connection with an objection to the FTA’s decision. Also, the new Article 35 allows for an extension of deadlines in certain cases.
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Articles 38 and 39
Refund and Collection of Tax
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Articles 34 and 35
Refund and Collection of Tax
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This concerns tax refunds. These articles have been rewritten and Article 39 (previously 34) includes a new sub-clause (2.b) that, subject to conditions, the FTA should not retain a refund payable to a taxpayer undergoing a tax audit. |
Articles 40 to 43
Collection of Tax
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Articles 37 to 40
Settlement and Collection of Tax and Administrative Penalties in Special Cases
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These Articles relate to the collection of tax and penalties. The update includes new clauses in Article 40, numbered (2), (3), and (4), which allow assets to be seized if there is a risk that the payable tax will be lost. |
Article 46
Statute of Limitation
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Article 42
Statute of Limitation |
This is related to the Statute of limitation. The recent changes to the VAT Decree-Law included a revision of the statute of limitation for tax audits, assessments and voluntary disclosures. A similar change has been included in the new Article 46 of the procedures Law. The relevant statute of limitation is now as follows: (a) The normal five- year statute of limitation will not apply if the FTA has notified the taxable person of the commencement of an audit and the audit is completed within four years from the notification. (b) The statute of limitation will be extended by one year if the taxable person submits a voluntary disclosure in the fifth year. (c) A taxable person cannot file a voluntary disclosure more than five years after the end of the relevant tax period.
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