User Guide issued on 14th April 2022.
The UAE’s Cabinet of Ministers recently introduced the mechanism of “whistleblowing” or Raqeeb, requiring the Federal Tax Authority (“FTA”) to receive and process leads relating to the non-compliance of natural or legal persons with the tax legislation, as well as to offer a monetary reward to informants when certain conditions are met. The aim is to encourage reporting non-compliant business activities in line with the FTA’s mandate to ensure compliance with applicable tax legislation, leading to a prosperous business environment with fair and equal opportunities.
On 14th April 2022, the FTA enabled the “Whistleblowing Form” on its website and issued User Guide [USEGWB001] on Raqeeb: Whistle Blower Program for Tax Violations and Evasion (“Raqeeb User Guide”, “the Guide”).
Summary of the Guide
Raqeeb User Guide explains the whistleblowing program and its process, and contains commentary on the applicable monetary reward and its eligibility. The Guide has been prepared to help informants successfully submit information and leads in a secure and confidential manner to inform the FTA of any natural or legal person evading tax or committing other tax offenses.
The whistleblowing program
Raqeeb User Guide defines the concept of “informant” and “lead” and includes detailed process descriptions on how to submit an eligible lead for the FTA’s review. Once the whistleblowing form is submitted to the FTA, the informant will be notified through an email and will be provided with a reference number. In the meanwhile, the FTA will begin its investigation of the lead. The FTA may at any time reach out to the informant to request further information or details.
The Guide also includes commentary on confidentiality and assures that the identity of the informant remains confidential and protected by the FTA.
The UAE’s Cabinet of Ministers has allowed the FTA to pay monetary rewards to eligible informants to encourage the participation of the public in reporting suspected non-compliant business activities or tax evasions. The amounts of the monetary rewards shall be proportionate to the amount of tax collected by the FTA in relation to the corresponding informed lead. Such rewards shall be deposited into the informant’s bank account post the FTA’s investigation and collection of corresponding tax.
The informant shall be eligible for the monetary reward where all the following conditions are met:
- The provided information is credible, accurate, and has not been obtained previously by the FTA;
- The whistleblowing form is filled out accurately, completely, and sufficiently;
- The FTA collected tax amounts that exceed AED 50,000; and
- The reported person exhausted all forms of objections and appeals.
The introduction of the Whistle Blower Program aims at combating cash economy and tax evasion (e.g. where businesses or individuals are knowingly avoiding VAT registration or filing incorrect VAT returns) and therefore should not impact tax-compliant businesses and individuals. However, should there be any areas of ambiguity over tax compliance with the UAE VAT legislation, KPMG has a team of experienced tax specialists that, in light of the evolving tax landscape in the UAE, can help you ensure your compliance with the UAE VAT legislation, assess your current tax position, advise on the appropriate tax treatment, prepare clarification requests, or represent you in front of the FTA as registered tax agents.
We are happy to discuss specific circumstances with you and determine the way forward should you have any questions or concerns in the regard of this new announcement.
Please get in touch with your usual KPMG contact or any of the tax professionals below.