New legislation has been announced as the UAE makes moves to establish a system of taxation.
The Tax Procedures Law, which establishes the cornerstone for a national tax framework, will apply primarily to companies and businesses operating within the country.
With an aim of regulating the administration and collection of taxes, the new law will define a clear set of guidelines with regard to Value-Added-Tax (VAT) and excise, as well as covering registration, returns and payments.
The new system will also see the formation of a Federal Tax Authority (FTA) to oversee the implementation of the new procedures, including audits, refunds and appeals, with penalties in place for evasion or non-compliance of the law.
Under the legislation, business owners will be required to keep accounting records for inspection for five years.
The news follows an announcement made in March this year, when the Federal National Council approved a draft law to introduce a five percent VAT levy for businesses, effective from January 2018.
Commenting on the new law, HH Sheikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai, UAE minister of finance and FTA chairman, said: “The law, issued by President HH Sheikh Khalifa bin Zayed Al Nahyan, 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.
“Implementing these taxes gives the UAE further leverage when it comes to international competitiveness and brings us one step closer towards building the future envisioned by our wise leaders, who have called on all those in charge to innovate and strive to spread happiness among citizens and residents.”
For more information, visit: mof.gov.ae