New Executive Regulations to the Tax Producers 

On 10 July 2023, the Prime Minister of the UAE, H.H. Sheikh Mohammed Bin Rashid Al Maktoum issued Cabinet Decision No. 74 of 2023 (“New Executive Regulations”), which abrogated the provisions of the Cabinet Decision No. 36 of 2017 (“Old Executive Regulations”).

1.    Timeline

28 April 2021 – Old Executive Regulations

1 August 2023 – New Executive Regulations (except Article 12 (2))

1 December 2023 – Article 12 (2) of the New Executive Regulations

2.    Key Changes and Amendments

• Article 1 (Definition of Assets) - Assets are now defined to include both tangible and intangible assets owned, leased or used for business.
• Article 2 (Keeping records) - Records such as correspondences, invoices, licenses, contracts, and other documents supporting the calculations made must also be retained.
• Article 3 (Record-keeping period) - Extension of retention period:

a)    Real estate records – 7 years from end of calendar year

b)   In case of submission of voluntary disclosures – additional 1 year if submitted in the 5th year from the end of the relevant tax period

c)    Legal representations – 1 year from the date legal representation expires

• Article 5 (Language) - Documents may now be submitted in English, subject to FTA’s discretion to request for Arabic translation.
• Article 6 (Registration amendment) - Changes in the following must be notified to the FTA:

a)    Email address

b)   Trade license activities

c)    Legal entity type, partnership agreement

• Article 6 (Deregistration) - FTA may deregister a registration who fails to submit a deregistration application
• Article 9 (Allocation of credits) - Excess credit balance may now be allocated by the FTA based on seniority of amounts due.
• Article 10 (Voluntary Disclosure) - Voluntary Disclosure shall be submitted in case of errors resulting in no difference in Due Tax
• Article 11 (Means of notification) - Communications through mobile text message, smart applications or electronic system of the FTA is now a valid means of notification
• Article 12 (Tax Agents) - Tax Agent for natural persons must be able to speak English or Arabic. Juridical persons may also qualify as Tax Agents.
• Article 16 (Tax Audits) - FTA shall provide notification 10 business days prior to Tax Audit. FTA must provide the basis of a tax assessment within 10 business days
• Article 22 (Sale of seized goods) - FTA may sell seized and abandoned goods
• Article 23 (Reconciliation in Tax Evasion) - FTA may reconcile in tax evasion crimes subject to settlement of the payable tax, administrative penalties and certain fees.
• Article 25 (Extension of deadlines) - Possible deadline extension:

a)    Tax assessment review and reconsideration requests – 20 business days

b)   Tax objection – 60 business days

Key Takeaways

• Ensure compliance with the amended record-keeping requirements, retention periods, registration and deregistration requirements, rules in filing of voluntary disclosures, and timelines for different tax procedures
• Familiarize with changes in rights and obligations during a tax audit.
• Understand the new conditions and requirements to register as Tax Agents.