The UAE Ministry of Finance announced the issuance of Cabinet Resolution No. (74) of 2023, which relates to the executive regulations of Federal Decree-Law No. (28) of 2022 regarding tax procedures, also known as the “new tax procedures law.” This decision comes to annul the previous Cabinet decision and replace the current executive regulations related to tax procedures to be in line with the new law, which began to be implemented on March 1, 2023, including updating definitions, procedures and processes.
The new Cabinet Resolution stipulates the requirements for maintaining accounting records and commercial books as well as the period and method for keeping them. The new Cabinet decision also includes updates related to the conditions for registering, canceling and suspending a tax agent, and the obligations and rights of a tax agent, including the requirement to communicate orally and in writing in Arabic and English.
Other important updates include procedures related to reconciliation in tax evasion crimes in terms of reconciliation terms and controls, tax refund procedures, tax payment and administrative fines in bankruptcy cases.
Cabinet Resolution No. (74) of 2023 comes into effect as of August 1, 2023, and as an exception from that, Clause (2) of Article (12) of this decision, related to the conditions that must be met by a legal person wishing to be registered in the tax agents register, starts with From December 1, 2023.
Table of Contents
The most important rules of the executive regulations are as follows:
Record Keeping:
- The accounting records and commercial books shall encompass the following:
- Records and books pertaining to the Business, wherein payments, receipts, purchases, sales, revenues, and expenditures are documented, along with any other relevant matters as required by the Tax Law or any applicable legislation, including, but not limited to:
(1) Balance sheet and profit and loss accounts.
(2) Records of wages and salaries.
(3) Records of fixed assets.
(4) Inventory records and statements (including quantities and values) at the end of each relevant Tax Period, as well as records of stock counts related to inventory statements.
All supporting documents substantiating the entries in the accounting records and commercial books, which may include, but are not limited to:
Correspondence, invoices, licenses, and contracts related to the Business.
Documents containing detailed information about any choices, assessments, determinations, or calculations made by a Taxpayer regarding the Tax affairs of their Business, including the basis or method used for assessment, determination, or calculation.
In addition to the accounting records and commercial books mentioned in Clause (1) of this Article, the Authority reserves the right to request any additional information necessary to verify the Person’s Tax obligations through a series of auditable documents, including their obligation to register for Tax purposes.
Period of Keeping Records:
- All accounting records, commercial books, and information shall be preserved and maintained in a manner that allows the Authority or any authorized employee to verify the Tax obligations of the relevant Person for the specified periods unless otherwise stated by the Tax Law:
- In the case of a Taxable Person, a period of (5) five years following the Tax Period to which they pertain.
- A period of (5) five years from the end of the calendar year in which the relevant document was created, for all Persons other than Taxable Persons.
- A period of (7) seven years from the end of the calendar year in which the concerned document was created, specifically for real estate records.
- All accounting records, commercial books, and information shall be preserved and maintained in a manner that allows the Authority or any authorized employee to verify the Tax obligations of the relevant Person for the specified periods, unless otherwise stated by the Tax Law:
- In addition to the periods mentioned in Clause (1) of this Article, the Person shall retain the books and records for the following additional periods under the following circumstances:
- For an extra period of (4) four years or until the dispute is conclusively resolved, whichever is later, in case of any dispute between the Person and the Authority concerning the Person’s Tax obligations.
- For an additional period of (4) four years if the Person is currently under an ongoing Tax Audit.
- For an additional period of (4) four years if the Authority notifies the Person of its intent to conduct a Tax Audit before the expiry of the period specified in Clause (1) of this Article.
- For an additional period of (1) one year, starting from the date of submitting a Voluntary Disclosure, for a Taxable Person who submits a Voluntary Disclosure in the fifth year after the end of the relevant Tax Period.
Method of Maintaining Accounting Records and Commercial Books:
1.should be available during the periods specified in Article (3) of this Decision.
(2) The information is preserved or stored as photocopies or electronic copies, and a readable copy can be produced upon request by the Authority within the time period specified by the Authority in accordance with the provisions of Article (48) of the Decree-Law.
(3) The information is retained or stored in a way that allows the Authority to verify the Person’s Tax obligations.
2.The Authority reserves the right to establish regulations governing the retention of information contained in accounting records and commercial books, and it may impose reasonable requirements to ensure that the information remains accessible as if the original records were preserved intact.
Language:
- The Authority has the option to accept data, information, records, and any other documents pertaining to any Tax that are submitted in English. However, the Authority reserves the right to request the Person to translate some or all of these documents into Arabic, as it deems necessary.
- Any translation of a Tax Return, data, information, records, documents, or other books into Arabic must adhere to the regulations governing translation in the State. Additionally, the approved translation should be submitted to the Authority within the specified time frame determined by the Authority.
The Procedures of Tax Registration, Deregistration and Amendment of Registration Data
1. A Tax Registration application shall be submitted to the Authority in the form and manner approved by it, and the Authority may specify any supporting documents to be submitted for that purpose.
2. The Authority shall review the Tax Registration application in accordance with the rules adopted by the Authority in this regard.
3. Tax Registration shall be finalised by issuing the Tax Registration Number for the applicant or by reactivating a previous Tax Registration Number if the applicant has a suspended Tax Registration Number
4. A Registrant shall notify the Authority, in the form and manner approved by it, within (20) twenty Business Days of any change to its data kept with the Authority, including:
- Name, address and email address
- Trade licence activities
- Legal entity type, partnership agreement for unincorporated partnerships and articles of association or its equivalent.
- Nature of the Business of the Registrant
- The address from which any Business is conducted by the Registrant.
5. A Tax deregistration application shall be submitted to the Authority in the form and manner approved by it, and the Authority may specify any supporting documents to be submitted for that purpose.
6. The Authority shall review the Tax deregistration application, in accordance with the rules approved by it in this regard.
7. In cases where the Registrant does not submit a deregistration application, the Authority may deregister such Registrant in accordance with the controls and procedures stated in the Tax Law.
8. Tax deregistration shall be finalised by suspending the Tax Registration Number.
9.The Authority shall notify the Person of its Tax Registration, deregistration or reactivation based on the mechanism adopted by the Authority in this regard.
Conditions and Eligibility for Registration of Tax Agents
- For a natural person seeking to be registered in the Tax Agents’ Register, the following conditions must be met:
Possess good conduct and behaviour.
Have no prior convictions for crimes or misdemeanours related to honour or honesty, even if subsequently rehabilitated.
Hold the minimum education and relevant experience in Tax, accounting, or law, in any of the following forms:
At least three years of experience acquired within the last five years and possess a certified bachelor’s or master’s degree in tax, accounting, or law from an education institution recognized by the competent authority in the State.
At least three years of experience acquired within the last five years and hold a certified bachelor’s degree in any other field from an educational institution recognized by the competent authority in the State, in addition to a valid professional qualification from a recognized institution, as specified by the Authority.
- At least five years of experience acquired within the last eight years and hold a certified bachelor’s degree in any other field from an educational institution recognized by the competent authority in the State
- Successfully complete any necessary training mandated by the Authority and pass any qualifying examination set by the Authority.
- Demonstrate proficiency in oral and written communication in Arabic or English
Hold valid professional indemnity insurance or be covered under such insurance, appropriate to the nature and size of the Tax Agent’s business.
Possess a license or work for an entity that holds a license from the competent authority.
Not be a current member of the Committee.
- For a juridical person aiming to be listed in the Tax Agents’ Register, the following conditions must be satisfied:
Hold a license as an audit, tax, or law firm.
Have valid professional indemnity insurance or be covered under such insurance, suitable for the nature and size of its business.
- Ensure that at least one director or partner meets all the requirements applicable to natural persons as stated in Clause (1) of this Article, supervises the services provided by the juridical person, and does not work for another juridical person or for its benefit.
- Comply with any additional conditions specified by the Authority.
3. The application for listing must be submitted to the Authority following the prescribed form and procedure.
- Before deciding on the listing application in the Register, the Authority may request further information from the applicant, conduct an interview with the natural person as stated in Clause (1) of this Article, or the partner or director according to paragraph (c) of Clause (2) of this Article, as applicable, or verify references and documents provided in the application.
- The Authority reserves the right to specify provisions related to procedures for listing Tax Agents, including matters related to the continuation, renewal, suspension, and cancellation of the listing.
Abrogation
1. The Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures, and its amendments, shall be abrogated.
2. Any provision contrary to or inconsistent with the provisions of this Decision shall be abrogated.
3. Decisions issued by the Authority and procedures applied by it for the implementation of Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures and its amendments shall remain in force, insofar as they do not contradict with the provisions of this Decision until the issuance of decisions and procedures replacing them in accordance with the provisions of this Decision.
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