New tax procedures executive regulation

Article (1) – Definitions

• The definition of the term “assets” has been expanded to include intangible assets    such as   patents, brands, licenses, trademarks, computer programs, copyrights, goodwill, and     customer lists.

Article (2) – Keeping Records

• The record keeping requirements have been updated to include documents such as  correspondences, invoices, contracts, and other documents supporting the accounting   entries, positions and calculations made, including documents supporting related party     transactions (transfer pricing documentation).

Article (3) – Period of Record Keeping

•  The periods of record keeping have been updated as follows:

1. Real estate related records and information needs to be retained for seven years from the end of the calendar year in which the document was created (this is different to VAT Law).
2. An additional period of one year will be added if a voluntary disclosure is submitted in the fifth year from the end of the relevant tax period.

• Under the New Executive Regulation, the FTA may now accept the tax return, information, records, and any other documents related to tax to be submitted in either English or Arabic.
  
• For Arabic translations specific conditions are added.

Article (6) – The Procedures of Tax Registration, Deregistration and Amendment of Registration Data

• Overall, the procedures of tax registration, deregistration and amendment of registration remain the same as already in effect, however, there has been the following key updates:

1. The requirements to notify the FTA by the registrant on any changes in the data and information have been extended to cover email addresses, trade license activities, legal status, and partnership agreements for unincorporated partnerships.
   
2. In cases where a registrant is required to deregister from certain tax type but does not submit a deregistration application, the FTA may now initiate such a process themselves.

Article (10) –Submission of Voluntary Disclosure

• The voluntary disclosure requirements have been updated as follows:

1. Where an error is resulting in a calculation of an additional output tax less than AED 10,000, the registrant is allowed to correct the error in the next tax return due for submission (either for a previous tax period or for the period in which the error has been discovered).
   
2. As per the Public Clarification, the FTA stipulated that for any errors which have no impact on the due tax, the registrant will be required to submit a voluntary disclosure to correct the error.
   

Article (12) – Conditions and Controls for Registration of Tax Agents

• The conditions to become tax agent as a natural person have been updated with the following key updates:
  

1. It is no longer a requirement for the tax agent to be able to communicate in both Arabic and English, as fluency in either of these languages is acceptable.
   
2. The tax agent must not be a current member of the Tax Disputes Resolution Committee.

•  The concept of a juridical person tax agent has been added to the New Executive Regulation   outlining the conditions for juridical persons to become tax agents. This particular concept   will be effective as of 1 December 2023.

Article (13) – Procedures for Tax Agent Listing and Delisting in the Register

• The procedures of listing and delisting of tax agents have been updated with the key update that the listing of a juridical person in the tax agent register is valid for one year from the date of listing.

Article (14) – Obligations and Rights of Tax Agents

• Additional obligations have been added in relation to the tax agents’ obligations in performing their duties as follows:

1. Tax agents are now required to continue to meet the continuous professional development requirements that will be further specified by the FT.
2. Tax agents are now subject to documentation retention requirements (documents, records, and data) in respect to any person represented by them.

Article (16) – Notice of Tax Audit

• Overall, the procedures of the tax audit and the rights and obligations remain the same as already in effect, however, under the New Executive Regulation the timeframe for the FTA to notify the person of a tax audit has been updated to be at least ten business days prior to the tax audit.

Article (22) –

Procedures and Measures

• Article (22) has been added to the New Executive Regulation giving the FTA the right to sell seized and abandoned goods that are perishable, and which are owned by a registrant.
• Subject to certain conditions, the owner of seized goods may request their recovery after the payment of all outstanding payable tax, all outstanding administrative penalties and any other expenses associated with such goods.

Articles (23 and 24) – Reconciliation in Tax Evasion Crimes

• The reconciliation in tax evasion crimes prior to the initiation of a criminal case, after initiation of a criminal case, or after issuance of a conviction judgment and its conditions, have been added to the New Executive Regulation.
• The conditions, controls, and procedures for reconciliation in tax evasion crimes are outlined in Article (24).

Article (25) – Extension of Deadlines

• Article (25) has been added to allow the extension of deadlines in relation to the following:

1. The FTA may extend the deadline for deciding on a tax assessment review request and a reconsideration request, for a period of twenty business days if the extension is necessary for the decision making process.
2. The Tax Disputes Resolution Committee may extend the deadline for deciding on a tax objection, for a period of sixty business days if the extension is necessary to decide on the objection.
3. The FTA may, at the request of the person, extend the deadline for submission of a tax assessment review or a reconsideration request, in cases deemed appropriate by the FTA.
4. The Tax Disputes Resolution Committee may, at the request of the person, extend the deadline for submission of a tax objection, mainly in emergency or force majeure situations.

Article (27) – Payment of Tax and Administrative Penalties in Cases of Bankruptcy

• A new timeframe for notifications by the appointed bankruptcy trustee and the FTA have been updated in the New Executive Regulation.