UAE SETS WORLD-CLASS TAX SYSTEM

abu dhabi — The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, has set the groundwork for the UAE’s planned tax system by issuing a law that regulates the administration and collection of taxes and clearly defines the role of the country’s Federal Tax Authority, or FTA.

Law No 7 of 2017 for tax procedures requires any person conducting any type of business to keep accounting records and commercial books, as well as any tax-related information as determined by the law. The procedures and rules mentioned in the law apply to all tax laws in the UAE, namely VAT and excise, and covers tax procedures, audits, objections, refunds, collection and obligations, such as submissions and voluntary disclosure rules, as well as tax evasion and general provisions. When the law comes into effect, UAE-based businesses will be required to keep accurate records for five years.

“The Tax Procedures Law is a significant milestone towards establishing the UAE’s tax system and diversifying the economy,” said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and FTA Chairman. “The Law, issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan is an 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. “We are working to establish an optimal legislative and executive environment to ease the nation into the VAT and excise tax systems. Implementing these taxes gives the UAE further leverage when it comes to international competitiveness and brings us one step closer towards building the future envisioned by our wise leaders, who have called on all those in charge to innovate and strive to spread happiness among citizens and residents.”

The law also sets penalties for non-compliance, and lays out clear appeals processes that are in line with international best practices to establish a fair and transparent environment for the FTA to carry out its mandate.