Cabinet Decision No. (74) of 2023

Recently, the UAE Ministry of Finance issued Cabinet Decision No. (74) of 2023 on the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures, also known as the New Tax Procedures Law. This decision replaces the existing Executive Regulation and ensures alignment with the New Tax Procedures Law, which took effect on March 1, 2023.

Key Highlights:

• Proper Maintenance of Accounting Records and Commercial Books

The Cabinet Decision introduces guidelines for the proper maintenance of accounting records and commercial books. Businesses are required to follow specific periods and manners of record-keeping to enhance transparency and compliance:

• 7 years for real estate
• 5 years for general document retention
• The period of 5 years is extended by one year from the date of submission of voluntary disclosure in the 5th year from the end of the relevant tax period.

• Language

The FTA will now officially accept English or Arabic language for any tax return, communication, document, or record, and any information related to a company’s tax records.

• Updates to Tax De-registration Procedures

The FTA will deregister any taxable person who is required to do so but fails to deregister.

• Addressing Tax Agents’ Rights and Responsibilities

The Cabinet Decision also addresses the rights and responsibilities of tax agents. This provides clarity on their roles in assisting businesses with tax compliance and reporting.

• Handling Tax Evasion Crimes through Reconciliation

The decision lays out procedures for reconciliation to resolve a violation before a criminal case is filed.

• Tax Refund Procedures:

A taxpayer who qualifies for a tax refund may apply for a refund with the FTA and the FTA, must notify the taxpayer of its decision within 20 business days, and upon approval of the request, must initiate the repayment procedures within 5 business days.

Cabinet Decision No. (75) of 2023

The Federal Tax Authority will impose penalties for various reasons, such as failure to file and pay corporate tax on time, inadequate record-keeping, and failure to submit the required records and information specified in the tax law, the details of the instances in which a violation may occur and the respective penalties are provided in Cabinet Decision No. (75) of 2023 related to administrative penalties for corporate tax violations.

•  Corporate Tax Compliance: A Shared Responsibility

Adhering to corporate tax compliance is a responsibility shared by all taxable entities.