The UAE minister’s Cabinet have recently had an amendment emanated in their Federal Laws that will provide better support to tax registrants, and will improve procedures in resolving any tax disagreements by the applicants.
The Federal Decree Law no. 7 of 2017 on Tax Procedures have been amended and the Federal Decree of Law No. 28 of 2021 has been issued, which will be implemented from 1st November 2021. Briefly, the amendment includes modifications in requirements to submit appeals, allows more time for applicants to file their argument, and allows more time to the FTA to look into the matter and issue their decision.
The details of each amendment are discussed in depth:
Article 27: Application Reconsideration
Under the new law, any person with a reasonable request meeting prescribed conditions can submit a request for reconsideration to the FTA. Previously, the timeline of submitting review was 20 days after issuing of decision. The time has now extended to 40 working days. The time required for FTA to go through, and decide on the request has also increased from 20 working days to 40 working days.
While this allows more time for applicants to collect necessary documents to file for review, the FTA can also dedicate more time and reach a decision free from possible loopholes.
Article 30: Submission of Objection or Refusal
Any person with a rational reason to file objection must do so within 40 days, rather than 20 days. The objection will be submitted to Tax Disputes and Resolution Committee (TDRC), respectively. As per the amendment, the requirement to file objection is that the applicant must request for settlement of taxes only, not the penalties.
In some cases, the authorities shall reject the objection. These instances include:
- The applicant did not file an application for review
- The tax related with the objection was unpaid
- The time of submission of request exceeded the prescribed time of 40 business days.
Article 32: Implementing Decision by the TDRC
Under this amendment, The Committee gives the final decision in relation of disputes that are not more than AED 100,000 shall fall under the indictment of execution category. In case the decision made over the dispute is of a value more than AED 100,000 a time of 40 business days shall be given after publication of the decision, within which a challenge can be submitted. After the prescribed time, the decision would be final and a indictment of execution.
The judge of the proficient court is the directorial authority of the issued indictment of execution as per the Federal Law no. 11 of 1992.
Article 32 bis: Exclusive Conditions
As per Article 32, If either group to the dispute an administration of federal government or local government, other ways for appeal will be emanate by the Cabinet.
The regulations outlined above addressing the protestations or appeal of federal and local government bodies linked to tax issues will apply until the Cabinet resolution is published and implemented.
Article 33: Conditions of Appeal Refusal
While any person can submit appeals, there are certain cases under which an appeal might be considered unacceptable. They are:
- If the appeal is inadmissible, as mentioned in cases of rejection of Article 30.
- The applicant fails to provide substantial proof of tax paying to FTA as per the decision of the
- The applicant fails to submit evidence of paying at least 50% of penalty as committee decided, either by using cash or through bank guarantee to the FTA. As per the direction of the Minister, The Cabinet can make changes to the mentioned percentage.
Article 46: Exclusive Facilitations or Waivers
As per the direction of the Director General, the committee can approve the receivable penalty amount from violator of provisions of tax laws to be paid in installments, or completely waive off the penalty amount. Even a recommendation of full or partial refund of the amount can be passed by The Director General. This recommendation shall come depending on proposition by the Minister and according to jurisdiction and procedures emanate by Council of Ministers.
Good Tidings for Tax Payers
With these amendments, the FTA has offered more flexibility to submit their disagreements to any decisions by the committee, to tax payers. This is a proof of UAE’s people-centered policies and its keenness to facilitate the taxpayers as much as possible.
With increased deadlines and lenient terms, the applicants have more time to collect their evidences and consult a suitable professional to assist in the process. The possibility of special decisions comes as a relief to applicants who consider it an opportunity of negotiation or successful results.
BS Auditing can help with the process of submitting an objection to the FTA in regards of penalties. When done right within the mentioned time of 40 days, clients can submit a sound objection. Book a consultation today.
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All information mentioned in the article is for information purposes only and cannot be used for any legal purposes. The information mentioned in the article is correct to the best of our knowledge. Any mistake is purely unintentional and accidental and must not be considered a deliberate action, or subject to any legal action thereof.
