Tax legislation that paves the way for a "diversified economy" has been issued by UAE President, Sheikh Khalifa. The Tax Procedures Law sets the foundations for the planned UAE tax system, regulating the administration and collection of taxes and defining the role of the Federal Tax Authority.
The law is focused on the collection of tax, largely VAT and excise, state news agency Wam reported. The was no reference made to personal income tax, and government officials have previously said there are no plans to tax individuals on their earnings.
"The Tax Procedures Law is a significant milestone towards establishing the UAE’s tax system and diversifying the economy," said Sheikh Hamdan bin Rashid, Minister of Finance and chairman of the Federal Tax Authority. He said the law is "an all-encompassing legislative framework that lays the groundwork for the UAE’s plan to implement taxes as a means to ensure sustainability and diversify the government’s revenue streams".
"The increased resources will enable the government to maintain the momentum of its development and infrastructure for a better future", Sheikh Hamdan said.
The law sets out the rights and obligations of the FTA and the taxpayer. It covers tax procedures, audits, objections, refunds, collection, and obligations – which include tax registration, tax-return preparation, submissions, payment and voluntary disclosure rules – in addition to tax evasion and general provisions.
When the Tax Procedures Law goes into effect - when it yet to be made clear - all UAE-based businesses will be required to keep accurate records for five years. The law also establishes the register of tax agents who may interact with the FTA on behalf of taxpayers.
"We are working to establish an optimal legislative and executive environment to ease the nation into the VAT and excise tax systems," Sheikh Hamdan said.
This article was originally published here on thenational.ae