How Tax Agents Should Perceive The Federal Law No. (7) Of 2017?

The Federal Tax Authority (FTA) of United Arab Emirates (UAE) on August 1^st, 2017 issued the landmark Federal Law No. (7) 2017 on Tax Procedures (FLTP). This law applies to various procedures of taxation connected to the collection administration, implementation of tax and liabilities & rights of the FTA, taxpayers and also their agents.

FLTP

The FLTP will prepare the basis for the UAE tax framework. The laws are not concrete yet and are subject to be consolidated further to specify particular taxes like Excise Tax and VAT Laws. These laws are all set to be put together shortly with the incorporation of the date for VAT in the UAE still decided for 1st January 2018.

An overview on FLTP:

It defines a set of usual processes and regulations to be adopted to all tax-related laws in the UAE and so emphasizes on the intended initiation of VAT and Excise taxes
It mentions the responsibilities and liabilities of the FTA and taxpayers and their agents
It mentions record keeping and language requirements
It describes the need for registration of tax, its completion and submission of payments and returns within a stipulated time
It mentions methods for handling tax audits, mistakes and deliberate disclosures
It emphasizes on the penalties for non-compliance, along with the processes for appeals
It recognizes the function of tax agents who may communicate with the FTA on behalf of the taxpayers, emphasizes the primary requirements for hiring the qualified tax agents, and sets the parameters for the maintenance of confidentiality by the Authority and also its officers.

Additionally, the FLTP lays down the requirement for any individual managing any organization, to keep commercial books and accounting records, aside from any other tax-related information. Presently, the statute of restriction has been decided on five years unless instances of non-registration or tax evasion have been found.

Although the FLTP has issued common guidelines for filing and registration of tax returns, the detailed description of the information is essentially other than the registration application.

The release of the FTLP regulations is a further affirmation of the UAE’s intention to move ahead with the integration of Value Added Tax and Excise Taxes. Organizations must take measures from now to ensure that they are capable of dealing with changes that will automatically follow after the implementation of these new taxes.

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