Fourth FTA Meeting
In order to review the achievement and implementation of the new tax, the FTA had conducted its fourth meeting under the chairmanship of Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, the Board of Directors of the Federal Tax Authority (FTA). Numerous decisions were taken in this meeting that have been listed below.
Decisions Taken by the FTA
1. Tourist Refund Tender
The outcome of the tourist refund tender was reviewed as the refund system would cover outlets and shops. The board had however urged to complete the procedures for implementing the system.
2. Reviewing of the Clarifications and Directives
The authority had also reviewed the clarifications and directives that was issued by the authority regarding the compliance of businesses with taxes and penalties that is based on the FTA’s jurisdiction in administration, collection and enforcement of taxes under the Federal Decree Law No (13) of 2016 on the establishment of the FTA.
3. VAT Registration Deadline Extended
As a result of satisfactory response by the business sectors and all the segments coupled with steady increase in the tax compliant ratios, the FTA has exempted the administrative penalty of the businesses from non registration of VAT. The businesses have been given a deadline till April 30 to get them registered. Furthermore, exemption from this penalty would benefit the free zone companies and branches of foreign companies.
4. Approving of the Registered Tax Agents
After meeting the required standards, conditions and qualifications, the Federal Tax Authority had approved the first batch of registered tax agents.
It also laid down the seven mandatory standards that the agents are required to meet in order to get registered, which are as follows:
● A Bachelor's or Master's degrees in tax, accounting or law from an accredited educational institution
● Bachelor's degree in another field in addition to holding a recognised certificate from an international association, specialised in tax
● At least three years of practical experience in taxation, accounting or law
● Fluency in Arabic and English
● Passing the tests in order to meet the FTA qualification criteria
● Possessing a professional indemnity insurance
● To be physically fit in order to perform the required tasks
● To practice the role through a legal person licensed by the relevant authorities
● To have good conduct,
● No conviction in any crime or misdemeanour prejudicial to honour or honesty, irrespective of whether or not they may have been rehabilitated.
Steps for Tax Agents Registration
- Apply for registration by submitting the approved application form.
- Before rejecting or approving the application, the authority may also request for additional information, interviews or inquire about the practical experience included in the application.
- Within 15 working days from the date of receiving the request, the authority would review the application and make its decision.
- In CASE OF APPROVAL, the application would be registered within 5 working days from the approval date or any other date determined by the authority after receiving the related fees.
- The authority may however REJECT the application in 2 ways, firstly in case of failure to meet the registration requirements and secondly, if registering, the said agent may compromise the integrity of the UAE tax system
5. Subcontracting Services
The Services that has been provided sub contractors can be treated as Zero Rated/ Exempted
Subject to article 31 of the Executive Regulation or as per article 33 of the Executive Regulation, insurance can be treated as zero rated as export of service
7. Date of Supply for Real Estate
As per article 25 and 26 of the Decree Law, there is no requirement of an unconditional sale or transfer of title in order to determine the date of supply for real estate.
8. RCM (Supplier with UAE Branch)
The supplier is not supposed to have a PR in UAE for reverse charge mechanism. In case the supplier has a UAE branch but the branch is not most closely related to supply, then supply would be treated as done by overseas HO and the recipient would apply RCM.
9. Supplies of Goods in DZ
Unless the supplies within the designated zones are used/ consumed, they are to be treated as OOS.
10. B2B Healthcare Services & Goods
The healthcare services that is necessary for treatment of recipient are zero rated and not to the provider. The B2B healthcare services are to be considered as being standard rated.
Further, the tax agent can raise invoices on behalf of the principal under its TRN & Principal in order to declare the same under its Return
The progress that has been made on the existing projects was also examined and evaluated by the Board of Directors. Some of them are: integrated electronic system of tax administration; the results of the registration for excise tax and VAT; and the plan to increase awareness among business sectors and consumers about the tax system and its mechanisms as well as the rights and responsibilities of all parties concerned