October 2022 / United Arab Emirates

The Federal Tax Authority (FTA) will be showcasing its latest digital initiatives at the 42^nd GITEX Global 2022, which is set to be held over five days starting from Monday, 10 October, at the Dubai World Trade Centre with more than 5,000 companies joining from over 90 countries.

In a press statement issued today, the Authority revealed that its participation at GITEX will highlight its latest digital initiatives, launched as part of the continuous development plans it carries out in accordance with the best standards. The initiatives are in line with the UAE Digital Government Strategy, designed to drive the smart transformation of all services, and introduce seamless and proactive digital services. The objective is to provide innoVATive models that embody the leadership and excellence of the government systems, and strengthen efforts to meet taxpayers’ aspirations and process their transactions quickly and efficiently.

FTA Director General His Excellency Khalid Ali Al Bustani said: “Through its participation at GITEX , the world’s largest tech event, the Federal Tax Authority aims to achieve two main objectives. The first is to introduce the FTA’s experts to the latest technologies and smart digital systems in the field of tax administration, which can be built upon to ensure the continuous development and modernisation of the FTA’s services. This, in turn, supports our efforts to fulfil the directives of our wise leadership and make the UAE one of the best countries in the world, safeguarding the Emirates’ advanced competitive position – all in line with the ‘Principles of the 50’, which act as a reference for all activities in the government sector moving forward.”

“Our second objective from participating at GITEX is to highlight the FTA’s services for taxpayers and provide an opportunity for participants and visitors to learn about the Authority’s digital service initiatives and its advanced systems through a series of workshops and demonstrations that highlight their importance in meeting taxpayers’ aspirations,” H.E. added, stressing that participation in such important events is in line with the FTA’s efforts to continuously coordinate with its strategic partners, while establishing and maintaining communication lines with government and priVATe sectors to ensure the best results.

The Authority went on to reveal that it plans to use its platform at GITEX Global 2022 to showcase a range of its smart initiatives, designed to enhance its digital infrastructure. These include the EmaraTax system for electronic tax services, and the corresponding EmaraTax application for smartphones and smart devices, which are scheduled to be launched in the near future. Also included is the FTA’s new and improved digital system for the VAT Refund Scheme for Tourists, which is the first system of its kind in the world, enabling 100% paperless digital transactions.

Furthermore, the FTA said it would be presenting details of the sustainable improvements the Authority is carrying out to enhance user experience when they avail its services. The team will also give a presentation on the advantages of the upgraded FTA website, which offers visitors an innoVATive digital experience, diverse content, and a clear and seamless browsing experience with advanced electronic display technologies. The presentation also sheds light on the FTA’s Interactive AI-Powered Tax Assistance feature, which is a chatbot service that offers concise answers to all questions visitors to the website may have.

While taking part in GITEX Global 2022, the FTA team will also be holding awareness workshops for visitors and participants on the VAT Refund Scheme for Tourists, the VAT Refund Scheme for UAE Nationals Building New Residences, the integrated electronic tax system EmaraTax, and the important role that youth play in creating new technologies to develop the FTA’s operations.

Source: Government of Dubai

The Council of Ministers has taken a decision concerning the tax residence of legal entities and individuals in the United Arab Emirates. Under the decision, and notwithstanding the provisions of tax treaties, the criteria for tax residence are determined as follows:

Legal entities

Legal entities are considered resident in the United Arab Emirates if they meet one of the following conditions:

• they have been established, formed or recognized in the United Arab Emirates. This excludes branches registered by foreign companies; and/or
• they are considered tax residents under UAE tax laws.

Individuals

Individuals are considered residents of the United Arab Emirates if they meet one of the following conditions:

• if their usual or principal residence and centre of their financial and personal interests are located in the United Arab Emirates, or if they meet the conditions and criteria that would be set by a decision of the Minister of Finance;
• if they are present in the United Arab Emirates for a period of 183 days or more in any 12-month period; and/or
• if they are UAE or GCC nationals or hold a UAE residence permit and are present in the United Arab Emirates for a period of 90 days or more in any 12-month period, and meet one of the following criteria:
  • they have a permanent residence in the United Arab Emirates; and/or
  • they are employed or engaged in business activities in the United Arab Emirates.

The Federal Tax Administration (FTA) has published amendments to the Excise Act introduced by Federal Decree-Law No. 19 of 2022 published on 26 September 2022. The main changes introduced by the decree-law are laid out below.

The first provision concerns the registration of excise duties:

• the decree law provides that a person importing excisable goods for purposes other than conducting business will be excepted from registration. The person shall, however, remain liable to pay the relevant excise duty on the import.

The second concerns the payment of the amount collected as excise duty:

• according to article 19 of the Decree Law, any amount(s) collected or reflected on an invoice as excise duty should be paid to the FTA.

The third rule concerns the limitation period:

• the Decree Law has introduced statute of limitation rules that set the maximum timeframe in which the FTA can take actions, such as commencing an audit or issuing a tax assessment; and
• as an exception to the general rule to conduct a tax audit or issue a tax assessment to the taxable person after 5 years from the end of the relevant tax period, the FTA may extend this right in the following instances:
  • if the FTA notified the taxable person of the tax audit before the expiry of the 5-year period, provided that the tax audit is completed, or the tax assessment is issued within 4 years from the date of the notification of the tax audit;
  • if the tax audit or tax assessment issuance relates to a voluntary disclosure submitted in the fifth year from the end of the relevant tax period, provided that the tax audit is completed or the tax assessment is issued, within 1 year from the date of submission of the voluntary disclosure. No voluntary disclosure may be submitted after 5 years from the end of the relevant tax period;
  • in the case of tax evasion, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the end of the tax period in which the tax evasion occurred; and
  • if a taxable person failed to register for excise duties within the prescribed period, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the date on which the taxable person should have registered excise duties.

Furthermore, the Cabinet may, according to a suggestion by the Minister of Finance, amend the statute of limitation in respect of instances where a taxable person was notified of an audit before the expiry of the 5-year period, or where a taxable person submitted a voluntary disclosure in the fifth year following the relevant tax period.

In all cases, the statute of limitation will be interrupted where any of the reasons as stipulated in Federal Law No. 5 of 1985, promulgating the Civil Transactions Law and its amendments, occur.

Dubai consolidated its status as the world’s leading foreign direct investment (FDI) hub, retaining its first rank globally for attracting FDI projects during H1 2022.

The news was announced by Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, on his Twitter.

Sheikh Hamdan said, “Dubai ranked first globally in term of FDI thanks to the vision and directives of @HHShkMohd. 492 projects opted for Dubai during 1H of 2022, reflecting investors’ strong confidence in Dubai, and its stable and conducive business environment backed with sophisticated infrastructure.”

Sheikh Hamdan also said, “Our strong partnership with international investment community is growing with a commitment to provide all growth ingredients and protect investors’ interest to achieve win-win situation, which will further raise Dubai’s status as a regional and global investment hub.”

Dubai also ranked first globally in attracting greenfield FDI projects during the same period this year, according to the Financial Times Ltd’s "FDI Markets”, the most comprehensive online database on cross-border greenfield investments.

Greenfield projects accounted for a 56 per cent share of Dubai’s FDI projects during the period, according to the Dubai Investment Development Agency (Dubai FDI), a DET entity, using data from its Dubai FDI Monitor.

Dubai witnessed FDI inflows of Dhs13.72 billion in H1 2022, reflecting a growth of 14.6 per cent compared to the same period last year.

Source: Gulf Today