UAE Biz Alert: Online registration for VAT opens Sept 15

prepare early for vat

ABU DHABI 16 August 2017: The Federal Tax Authority (FTA) announced that it will open online registration for tax purposes for businesses in mid-September 2017.

It will provide an integrated system to serve the business sectors as per the highest international standards.

“The Excise Tax and VAT Laws are expected to be issued during the third quarter of this year and the regulations concerning both laws in addition to the Federal Tax procedures are expected to be issued during the fourth quarter of 2017,” said Khalid Ali Al Bustani, Director General of the FTA.

Al Bustani said: “Tax laws and procedures in the UAE are simple and easy to comply with, and were developed based on in-depth studies of all options and reviewing various international practices. The Tax Procedure Law is a legislative framework that defines the FTA’s system of work regarding the management, collection and implementation of federal taxes, and contributes to the promotion of the principles of governance and transparency in all tax transactions.

“We have introduced an integrated tax management system that forms an electronic platform for registration, submission of tax returns and tax payable owed by the taxable persons. Further, we have developed innovative systems and integrated them with concerned departments/entities in Emirates governments such as customs’ departments for the purpose of managing and collecting taxes on import.”

Low Tax

The application of the tax system will not affect the country’s competitiveness because it is among the lowest in the world, and it will also support efforts towards enhanced services and help achieve the highest levels of happiness for all members of the UAE community. The taxes will be self-compliant and voluntary for business sectors, with swift taxation procedures that are electronic, fully automated and in accordance with the highest international standards.

Al Bustani said that the registration processes will begin first with blue-chip companies, as well as companies that produce and import excise goods, where further details will be provided in a later stage. The registration processes will be conducted through e-Services on the FTA’s website, which will be launched in the second half of this month (August) and will provide services 24×7, and will offer all the relevant information on the UAE taxes.

“Businesses can register via our website to ensure their readiness at the time of issuance of the VAT and Excise Tax laws and their regulations. After this, details about the tax period, submissions of tax returns and tax payable will be announced.” he explained

“Through our efforts and strategic partnerships, the FTA seeks to provide the best services that will help the business sector to prepare early for VAT and excise tax implementation. After this, details about the tax period, submission of tax returns and tax payable by taxable persons will be announced” he said.

“The FTA, along with the Ministry of Finance, conducted the first phase of the awareness sessions on the tax system for various business sectors and relevant stakeholders from March to May 2017. 24 awareness workshops were conducted, which witnessed the strong participation of more than 15,000 companies from different business sectors operating in various emirates,” he said.

Second Phase

Al Bustani added: “We have recently launched the second phase of the tax system’s awareness plan, which focuses on conducting 21 specialized workshops on the VAT and excise tax treatment of the different business sectors, in co-operation with institutions and government authorities such as Chambers of Commerce. The workshops will specifically address the retail sector, real estate, imports and exports, and the financial services and insurance.

“At the later stage of the implementation, we will work to ensure the smooth transition to the indirect-tax economy, and explore the aspects of continuous development of tax procedures in the UAE, in alignment with the ongoing international advances in this field,” Al Bustani said.

HE Khalid Ali Al Bustani, Director General of the FTA

He explained: “Tax is a new concept in the UAE community and the region. It is important to emphasize the great role of our strategic partners in raising awareness of tax procedures and ensuring the success and excellence of the UAE tax system. The UAE has the lowest rates, and is the most competitive globally with a rate of 5% on the supply of goods and services. The success of the UAE tax system is therefore a shared responsibility and requires strategic co-operation based on three pillars: the government, the business sector and the community.”

He said: “We assure you that the FTA will continue to analyse and evaluate the work of several tax authorities around the world to obtain the most effective methods of tax management to provide leading business and consumer services.”

Earlier in 2016, His Highness Sheikh Khalifa bin Zayed Al Nahyan UAE President issued the Federal Law No. 7 of 2017 for Tax Procedures, which sets the foundations for the planned UAE tax system, regulating the administration and collection of taxes and defining the role of the FTA.

By Rajive Singh