Tax Procedures Law

Article (1) Definitions

Part One: Definitions and Scope of Application

For the purpose of applying the provisions of this Decree-Law, the following words and expressions shall have the meanings assigned thereto respectively, unless the context requires otherwise: State: The United Arab Emirates. Minister: The Minister of Finance. FTA: The Federal Tax Authority Director-General: The Director General of FTA. Business Day: Any weekday, except for weekends and public holidays of the Federal Government. Committee: The Tax Dispute Settlement Committee. Competent Court: The federal court within the jurisdiction of which the headquarters of FTA or any of its branches is located. Tax: Any federal tax levied by virtue of the Tax Law where the management, collection and implementation thereof is entrusted to the FTA. Tax Law: Any federal law whereby the Tax is levied. Tax Domicile Certificate: A certificate issued by the FTA confirming the Tax domicile of a person in the State, pursuant to the provisions of Article (53) hereof. Tax Resident: A person residing in the State, pursuant to Article (53) hereof. Person: A natural or legal person. Business: Any activities carried out regularly, continuously and independently by any Person anywhere, such as industrial, commercial, agricultural, professional, craft, service or drilling activities, any activity related to the use of tangible or intangible property, or any other activity determined by the Tax Law. Taxable Person: Any Person registered or required to be registered for the purpose of the provisions of the Tax Law. Taxpayer: Any person required to pay the Tax in the State under the Tax Law, whether a Taxable Person or end consumer. Tax Return: The information and data specified for taxation purposes and provided by the Taxable Person, according to the form and mechanism designated by FTA, including the relevant annexes and schedules Tax Period: The period of time specified in the Tax Law for which the Tax due is required to be calculated. Tax Registration: It is a procedure whereby a Person registers its name with the FTA or the latter registers the same with it, as the case may be, for Tax purposes. Tax Registration Number: It is a unique number issued by FTA for each Person for Tax purposes. Registered Person: The Taxable Person having a Tax Registration Number. Legal Representative: A guardian, trustee or curator with regard to incapacitated Persons or Persons with diminished capacity, or the court-appointed bankruptcy trustee with regard to a company undergoing bankruptcy, or any Person legally appointed to represent another Person. Due Tax: A Tax that is calculated and levied under the provisions of the Tax Law. Payable Tax: A Tax payable to FTA Administrative Fines: Sums imposed on the Person by FTA due to the violation of the provisions of this Decree-Law, the Tax Law or the cabinet resolutions issued in implementation thereof. Refundable Tax: Amounts refundable by FTA to the Taxpayer, in whole or in part, pursuant to the Tax Law and this Decree-Law. Tax Assessment: A decision made by FTA under Article (23) hereof. Assessment of Administrative Fines: A decision issued by FTA on the Administrative Fines. Notification: Notifying the Person of decisions issued by the FTA, as per the means set forth in this Decree-Law and the Executive Regulations hereof. Voluntary Declaration: It is a form designated by FTA whereby the Taxpayer notifies FTA of any error or omission in the Tax Return, Tax Assessment or tax recovery application, pursuant to the provisions of Article (10) hereof. Register: The Tax Agent Register. Tax Agent: Any Person registered with FTA authorized by another Person to represent it before FTA, help it to perform its tax obligations and exercise its relevant Tax rights. Tax Audit: It is a procedure carried out by FTA for auditing commercial records or any information, data or commodities related to a Person to verify the fulfillment of their obligations under this Decree-Law or the Tax Law. Tax Auditor: Any FTA employee appointed to carry out the Tax Audit. Tax Evasion: The Person's use of illegal means that result in reduced amount of the Due Tax, non-payment of Tax or recovery of a Tax which the Taxpayer has no right to recover according to this Decree-Law or the Tax Law. Executive Regulations: The Executive Regulations of this Decree-Law. E-Invoicing System: An electronic system specifically used for issuing, sending, exchange and sharing of the details of invoice and credit note according to the provisions of this Decree Law.

Article (2) Objectives of this Decree-Law

Part One: Definitions and Scope of Application

This Decree-Law is intended to: 1.Regulate rights and obligations of the FTA, Taxpayers and any other Person dealing with the FTA, in compliance with the provisions of this Decree-Law or the Tax Law. 2.Regulate common procedures and rules applicable to all tax laws in the State.

Article (4) Record-Keeping

Chapter One: Keeping Accounting Records and Commercial Books

Any Person that carries out any business or is subject to an obligation under the Tax Law shall keep records for their accounting activities and commercial books, as well as any tax-related information as determined by the Tax Law, in conformity with the controls laid down by the Executive Regulations.

Article (4) BIS E-Invoicing System

Chapter One: Keeping Accounting Records and Commercial Books

1. The Minister shall issue the resolutions required for implementing the E-Invoicing System, determining its effective date, and the requirements and provisions required for carrying out the relevant controls, rules and procedures. 2. Any person designated by the Minister shall be subject to the E-Invoicing System.

Article (5) Language

Chapter One: Keeping Accounting Records and Commercial Books

1.Every Person shall submit the Tax Return as well as data, information, records and documents related to the Tax they are obligated or required to submit to the FTA in Arabic. 2.Notwithstanding the provisions of Clause (1) above, FTA may accept the Tax Return and the information, data, records and documents related to the Tax in any other language; provided that the Person provides FTA with a translated copy of any of the same into Arabic if required by the FTA, as stipulated by the Executive Regulations. 3.A Person that submits any translated copy of the data, information, records and any other documents related to any tax to FTA shall be liable for the accuracy and validity of such translated copies, and shall bear all relevant costs. The FTA may rely on the translation submitted thereto.

Article (6) Tax Registration, Deregistration and Amendment to Data

Chapter Two: Tax Registration

1.The Taxable Person may submit the registration application to the FTA pursuant to the provisions set forth in the Tax Law. 2.The Registered Person shall: a.Include its Tax Registration Number in all communications and transactions with FTA and third parties according to the provisions of the Tax Law. b.Notify FTA according to the form and mechanism designated by FTA of the occurrence of any case that may require amendment to the information related to its Tax Register kept at FTA, within twenty (20) business days from the occurrence date of such case. c.Submit a deregistration application in accordance with the relevant provisions in the Tax Law. 3.The Executive Regulations shall determine the Tax Registration and deregistration procedures as well as the amendment to its data. 4.Government bodies in charge of granting business licenses shall notify FTA upon granting any license, no later than twenty (20) business days from the issuance date of the license, as stipulated in the Executive Regulations.

Article (7) Legal Representative

Chapter Two: Tax Registration

The Legal Representative shall: 1.Notify FTA of his appointment, within twenty (20) Business Days from the appointment date, according to the procedures defined by the Executive Regulations; 2.Submit Tax Returns to FTA on behalf of the Taxable Person; and 3.Comply with any requirements under this Decree-Law and the Tax Law, as the case may be.

Article (8) Tax Return Preparation and Submission

Chapter Three: Tax Return and Payable Tax

1.Every Taxable Person shall: a.Prepare and submit the Tax Return to FTA pursuant to the provisions of this Decree-Law and the Tax Law; and b.Pay any Payable Tax within the time limit set forth in this Decree-Law and the Tax Law. 2.Any incomplete Tax Return delivered to FTA shall not be admitted if the same fails to contain the basic data defined by the Tax Law. 3.Any Taxable Person shall be responsible for the authenticity of information and data contained in the Tax Return and any communications with FTA. 4.Any Taxpayer shall pay the Payable Tax and the Administrative Fines within the time limit defined in this Decree-Law and the Tax Law.

Article (9) Determination of the Payable Tax

Chapter Three: Tax Return and Payable Tax

1.The Taxable Person shall, upon the payment of any amount to FTA, determine the type of Tax and the Tax Period related to such amount, and FTA shall allocate the paid amount accordingly. 2.When the Taxable Person pays any amount without determining the type of Tax or Tax Period, FTA may allocate the amount or a part thereof for the payment of any Tax or amounts owed by the Taxable Person, as defined by the Executive Regulations. 3. If the Taxable Person pays an amount greater than the Payable Tax amount or has a credit balance with the Authority, the latter may allocate such amount or balance for the payment of any Tax or other amounts owed by the Taxable Person to the Authority, within a period not exceeding five (5) years from the end of the relevant Tax Period referred to in Clause (2) of Article (38) of this Decree-Law, as defined by the Executive Regulations. 4.If the Taxable Person pays an amount less than the Payable Tax amount, the provisions set out in Chapter Four of Part Three and Chapter Two of Part Five hereof shall apply.

Article (10)

Chapter Four: Voluntary Declaration

1.If the Taxable Person finds out that the Tax Return submitted to FTA or the Tax Assessment issued by FTA is incorrect in a way which causes the Payable Tax according to the Tax Law be calculated in an amount less than the correct amount, they shall submit a Voluntary Declaration. 2.If the Taxpayer finds out that the tax recovery application submitted to FTA is incorrect, in a way which causes the recovery amount due to them under the Tax Law be calculated at in an amount higher than the correct amount, they shall submit a Voluntary Declaration. 3.If the Taxable Person finds out that the Tax Return submitted to FTA or the Tax Assessment issued by FTA is incorrect, in a way which causes the Payable Tax according to the Tax Law be calculated in an amount higher than the correct amount, they may submit a Voluntary Declaration. 4.If the Taxpayer finds out that the Tax recovery application submitted to FTA is incorrect, in a way which causes the recovery amount due to them under the Tax Law be calculated at an amount less than the correct amount, they may submit a Voluntary Declaration. 5. If the Taxpayer becomes aware of an error or omission in the Tax Return submitted to the Authority, without a difference in the amount of Tax Due, they shall correct such error by submitting a Voluntary Disclosure in the cases determined by the Authority, or by correcting it through a Tax Return in any other case.6.The Executive Regulations shall define the detailed provisions related to the Voluntary Declaration to the FTA, and the mechanism of applying the Administrative Fines levied before the Voluntary Declaration.

Article (11) Methods of Notification

Chapter One: Notification

1.FTA shall notify the Person of any decisions or procedures through their address registered with the FTA. 2.The Person shall be deemed to have been notified of any decision and has received any communications if the FTA has sent Notifications and communications according to Clause (1) above. 3.The Executive Regulations shall define the means of Notification and communications.

Article (12) Tax Agent Registration

Chapter Two: Tax Agents

1.FTA shall create a Tax Agent Register. 2.Any Person may operate as a Tax Agent in the State only after fulfilling the registration conditions, being registered in the Register and obtaining the license from the competent local authority.

Article (13) Requirements for Registration in the Register

Chapter Two: Tax Agents

1.The Executive Regulations shall determine the conditions, controls and procedures for registration, suspension of registration and deregistration of the Tax Agent in the Register, as well as rights and obligations of the Tax Agent. 2.The Tax Agent shall notify FTA if they cease to operate as a Tax Agent, pursuant to the controls and procedures set out in the Executive Regulations.

Article (14) Appointment of Tax Agent

Chapter Two: Tax Agents

1.The Person may appoint a Tax Agent to act on its behalf and in its name in respect of its obligations on Tax affairs under this Decree-Law or the Tax Law, without prejudice to the liability of such Person under this Decree-Law or the Tax Law. 2.Subject to Clause (2) of Article (15) above, FTA may not deal with the Tax Agent in respect of any Person if the latter notifies FTA of expiration of the agency or dismissal of the Tax Agent, as described in the mechanism set by FTA.

Article (15) Records of the Person with the Tax Agent

Chapter Two: Tax Agents

1.The Tax Agent shall retain the information, documents, records and data related to any Person represented or that had been represented by the Tax Agent, within the period and in such manner as described in the Executive Regulations. 2.The Tax Agent shall, upon FTA request, provide the same with all information, documents, records and data in their possession required in respect of any Person represented or that had been represented by the Tax Agent.

Article (16) FTA's Right to Conduct Tax Audit

Chapter Three: Tax Audit

1.FTA may conduct a Tax Audit of any Person in order to verify the compliance with the provisions set forth in this Decree-Law and the Tax Law. 2.FTA shall notify the Person of a Tax Audit at least (10) ten days prior to the Tax Audit. 3.FTA may conduct the Tax Audit at FTA's headquarters, the business place of the Person subject to audit or elsewhere at which such Person carries out their business, stores commodities or keeps records. 4.Notwithstanding the provisions of Clause (2) above, a tax auditor may access, without prior notice, to anywhere at which the Person subject to audit carries out its business, stores commodities or keeps records, and may close down the same temporarily for conducting the audit for a period not exceeding (72) seventy two hours in any of the following cases: a.If FTA has serious reasons to believe that the Person subject to the Tax Audit is involved or implicated in Tax evasion in respect of the obligations of such Person or any other Person imposed by this Decree-Law or the Tax Law. b.If FTA has serious reasons to believe that failure to temporarily close down the place at which the tax audit is conducted may impede the audit. c.If the Person that had been notified of the Tax audit under Clause (2) above attempts to prevent the Tax auditor's access to the place at which the Tax audit is to be conducted. 5.In all the cases set forth in Clause (4) above, the Tax auditor shall obtain prior written consent of the Director-General or his representative and permission from the Public Prosecution if the place required to be accessed is a housing place. 6.Premises closed down under this Article shall be reopened after the lapse of the (72) seventy-two hours, unless FTA obtains permission from the Public Prosecution that permits the extension of the closure period for a similar period before the lapse of the mentioned seventy-two hours. 7.The Executive Regulations shall determine the necessary procedures related to Tax audit.

Article (17) FTA's Right to Access to Original Records or Photocopies During Tax Audit

Chapter Three: Tax Audit

A Tax auditor may, while conducting the Tax Audit, access to original records or photocopies thereof and take samples of goods, devices or other assets from the business place of the Person subject to the Tax Audit or those in its possession or seize the same, in accordance with the controls defined by the Executive Regulations.

Article (18) Tax Audit Timing

Chapter Three: Tax Audit

A Tax Audit shall be conducted during the normal business hours of FTA. If necessary, the audit may be conducted beyond such times under extraordinary circumstances by a decision of the Director-General or his representative.

Article (19) New Information Appears After Tax Audit

Chapter Three: Tax Audit

Without prejudice to the provisions of Article (46) hereof, FTA may audit any matter that had already been audited if new information comes out that may affect the outcome of the Tax audit; provided that such audit shall be subject to the Tax audit procedures in accordance with the provisions of this Decree-Law and the Executive Regulations thereof.

Article (20) Cooperation During Tax Audit

Chapter Three: Tax Audit

Any Person subject to a Tax Audit or their Tax Agent or legal representative shall be required to provide all facilities and possible assistance to the Tax auditor in order to enable him to perform his job.

Article (21) Rights of Persons Subject to Tax Audit

Chapter Three: Tax Audit

A Person subject to a Tax audit shall have the right to: 1.Request Tax auditors to show their professional ID cards; 2.Obtain a copy of the Tax audit Notification; 3.Attend the Tax audit conducted outside FTA; and 4.Obtain copies of any original paper or digital documents that are seized or obtained by FTA upon the Tax audit, as defined by the Executive Regulations.

Article (22) Notification of Tax Audit Findings

Chapter Three: Tax Audit

1.FTA shall notify the Person subject to Tax Audit of the Tax Audit outcome within the time limit and according to the procedures determined by the Executive Regulations. 2.The Person subject to Tax audit may access to and obtain the documents and information relied upon by FTA for assessment of the Due Tax according to the controls set by the Executive Regulations.

Article (23) Tax Assessment

Chapter Four: Tax Assessment and Assessment of Administrative Fines

1.FTA shall issue a Tax Assessment to determine the value of the Payable Tax, Refundable Tax or any other matters specified by the Tax Law or the Executive Regulations, and shall notify the Taxpayer of the same within (10) ten Business Days from the issuance date thereof in any of the following cases: a.The Taxable Person fails to apply for the Tax Registration within the time limit prescribed in the Tax Law. b.Failure of the Registered Person to submit the Tax Return within the time limit prescribed by the Tax Law. c.The Registered Person's failure to pay the Tax indicated as a Payable Tax in the Tax Return submitted within the time limit prescribed in the Tax Law. d.The Taxable Person has submitted an incorrect Tax Return. e.The Registered Person's failure to calculate the Tax on behalf of another Person when he is obliged to do the same in accordance with the Tax Law. f.If the Payable Tax is incomplete as a result of Tax Evasion by the Person or due to Tax Evasion in which he was involved. g.Any other cases under the Tax Law. 2.FTA may issue an estimated Tax Assessment of the Payable Tax and the Refundable Tax if it is not possible to determine the actual amount of the Payable Tax or the authenticity of the Tax Return. In this case, FTA shall: a.Amend the estimated Tax Assessment issued under this Article based on new information that may affect the subject of the Tax Assessment. b.Notify the Person concerned of such amendments within (10) ten Business Days following the amendment date. 3.The Executive Regulations shall specify the information or data to be included in the Tax Assessment.

Article (24) Assessment of Administrative Fines

Chapter Four: Tax Assessment and Assessment of Administrative Fines

1.FTA shall issue an assessment of Administrative Fines and inform the Person of same within (5) five Business Days in respect of any of the following violations: a.The Person that carries out business or is subject to an obligation under this Decree-Law or the Tax Law fails to keep the required records and other information specified both in this Decree-Law and the Tax Law. b.The Person that carries out business or is subject to an obligation under this Decree-Law or the Tax Law fails to submit the data, records and documents related to the Tax in Arabic to FTA upon request. c.The Taxable Person fails to submit the Tax Registration application within the time limit specified in the Tax Law. d.Failure of the Registered Person to submit a deregistration application within the time limit specified in the Tax Law. e.Failure of the Registered Person to inform FTA of any situation that may require amendment to the information related to its tax register kept by FTA. f.The Legal Representative of the Taxable Person fails to report his appointment as a legal representative within the specified time limits. In such a case, fines shall be collected from the funds of the Legal Representative. g.The Legal Representative of the Taxable Person fails to submit the Tax Return within the specified time limits. In such a case, fines shall be collected from the funds of the legal representative. h.Failure of the Registered Person to submit the Tax Return within the time limit specified in the Tax Law. i.The Taxable Person fails to pay the Due Tax within the time limit specified in the Tax Law. j.The Registered Person has submitted an incorrect Tax Return. k.A Voluntary Declaration submitted by the Taxable Person or Taxpayer on errors in the Tax Return, Tax Assessment or the application for recovery of the Tax, in accordance with clauses (1) and (2) of Article (10) above. l.The Taxable Person or Taxpayer fails to make a Voluntary Declaration of errors in the Tax Return, Tax Assessment or tax recovery application, in accordance with Clauses (1) and (2) of Article (10) of this Decree-Law before being notified that FTA conducted a Tax Audit on it. m.The Person that is subject to the Tax Audit or their Tax Agent or Legal Representative fails to provide facilities for the Tax auditor, in violation of the provisions of Article (20) of this Decree-Law. In such a case, fines shall be collected from the funds of the Person or their legal representative or Tax Agent, as the case may be. n.The Registered Person fails to calculate the Tax for another Person when the registered Taxable Person is obligated to do the same in accordance with the Tax Law. o.Any other violation included in the Tax Law or under a resolution of the Cabinet. 2.The Executive Regulations shall specify the information and data to be included in the assessment of Administrative Fines. 3.The Cabinet shall issue a Resolution setting out the Administrative Fines for each of the violations mentioned in Clause (1) above, with regard to this Decree-Law, the Tax Law or any other violation specified under a Cabinet resolution. 4.The amount of any Administrative Fine shall not exceed twice the Tax amount on which the Assessment of Administrative Fines has been issued. 5.The imposition of any Administrative Fine under the provisions of this Decree-Law or any other law shall not relieve any Person from their liability to pay the Due Tax, in accordance with the provisions of this Decree-law or the Tax Law.