10 August 2023
Updates in Executive Regulations related to Tax Procedures Law

Cabinet Decision No. (74) of 2023 on the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures (New Executive Regulation) was issued, which revoked Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures and its amendments (Old Executive Regulation). The New Executive Regulation is effective from 1 August 2023. We have provided a detailed explanation, basis our understanding of the literal translation of the relevant amendment in the table below:

Article No. Heading Amendment Nexdigm Comments
1 Definition A new definition has been provided for assets. The term "assets" has been expanded to include intangible assets such as patents, brands, licenses, trademarks, computer programs, copyrights, goodwill and customer lists. The expansion in the scope shall have significance while interpreting the meaning of "asset" in the context of Article 18 of the New Executive Regulation, which speaks about the Authority of the Auditor to Seizure and Retain of Documents and Assets.
2 Accounting records and commercial books It is now mandatory to keep records supporting the entries in the accounting records and commercial books, such as invoices, contracts, correspondence and documents containing details of tax positions and tax calculation methods. The introduction of new record-keeping requirements is a welcome move for aligning the requirements considering the introduction of Corporate Tax.
3 Period of record keeping The amendment prescribes a period for which all accounting records, commercial books and documents are to be maintained:
  • For Real Estate records, the period has been reduced to seven years instead of a prior period of 15 years.
  • For case where voluntary disclosure is submitted, the retention period of five years will be extended by one year.
The Authority adopted the move to empower FTA to conduct audits without any drawbacks in cases where Voluntary Disclosure is filled in 5th year. It also relaxes taxpayers as the retention period is reduced for real estate documents.
5 Language Under the New Executive Regulation, the FTA may now accept tax returns, information, records, and any other documents related to tax to be submitted in English and may request some or whole to be translated to Arabic. The said move is beneficial to the taxpayer as this will reduce the procedural requirement.
6 Procedures relating to Tax Registration, Deregistration and Amending Details of Registration According to this amendment:
  • A registrant shall notify the Authority within 20 business days of any change to its data in relation to details provided during registration.
  • At its discretion, FTA Deregister a registrant where the person is required to Deregister but fails to submit a Deregistration application.
FTA has initiated this step to ensure that there is an update available with regard to the changes and reduction in fake registration.
11 Means of Notification FTA can now notify a person through post, text messages on mobile phones, notifications through smart applications and through the FTA's electronic systems. The taxpayers should diligently keep track of notifications to avoid any delay in response or penalty.
12 Tax Agents
  • It is no longer a mandatory requirement for the tax agent to have the ability to communicate orally and in writing in Arabic and English, as fluency in either of these languages is acceptable.
  • The concept of a juridical person tax agent has been added to the UAE tax legislation. A juridical person with a trade license reflecting that the legal person is licensed as an audit, tax or law firm can also register as a tax agent. The said amendment is effective from 1 December 2023.
This amendment will extend the scope for registration as Tax Agent, and more tax professionals can reap the benefits by becoming tax agents.
13 Procedures for Tax Agent Listing and Delisting in the Register Every judicial tax agent is required to renew their registration every year.
22 Procedures and Measures
  • FTA may sell seized and abandoned goods that are perishable, subject to shortage or leakage, or in a condition that might endanger the safety of other goods or facilities they are in per the prescribed procedure.
  • The owner may request their recovery after the payment of all outstanding payable tax, administrative penalties and any other expenses associated with such goods.
Taxpayers need to be mindful while making the import and determining the duty rates payable.
23-24 Reconciliation process - Tax Evasion crimes
  • The Authority may reconcile in Tax Evasion crimes and deliberate failure to settle Administrative Penalties in return for full settlement of Payable Tax and Administrative Penalties prior to initiation of a criminal case and after initiating the criminal case. There are certain limits prescribed as regards the amounts to be settled.
  • Article 24 specifies Conditions, Controls and Procedures for Reconciliation for such reconciliation.
The ambiguity in relation to criminal proceedings against taxpayers is set aside by the introduction of proper procedures by the FTA.
25 Extension of deadlines
  • FTA may extend the deadline for deciding on a tax assessment review request and a reconsideration request for a period of 20 business days.
  • Tax Disputes Resolution Committee may seek an extension of 60 business days for tax disputes.
FTA has increased its scope of assessment by clarifying the scope of extension of deadlines.
27 Bankruptcy The FTA shall, within 20 business days after being notified of the trustee's appointment, notify them of the amount of the due tax in respect of the business subject to bankruptcy and, where applicable, of its intention to perform a tax audit for the specific tax period(s). The time limit for notifying the taxpayer has been specifically clarified. This is a welcome move as this shall benefit taxpayers in restricting their liability.
Our Comments
The amendment to Tax Procedures, which has come into effect from 1 August 2023, along with Public Clarification issued in said regard, provides the changes that are required to be undertaken in which businesses are functioning at present.

Basis the above, the business shall be required to conduct a detailed impact assessment as the amendments would impact:
  • Policy changes - Like a change in the manner of making amendment applications on the portal.
  • Revisiting the tax position already undertaken.
  • Maintenance of requisite documentation and records.
Accordingly, to avoid penal consequences, businesses are advised to ensure that changes required in carrying out business in the UAE are carried out.
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