New tax procedures and penalties for companies and individuals have come into force in the UAE

16th of August

Effective August 1, 2023, two government decrees relating to corporate and personal tax collections in the UAE came into effect. These regulations enact new tax procedures and penalties for violations of Arab Emirates law. The regulations govern the taxation of profits, the collection of excise taxes and VAT, and the collection of penalties for violations of the Corporate Tax Law.

Changes in tax procedures in the UAE

UAE Government Resolution No. 74 made the following key changes to the Executive Regulations on Tax Procedures:

  • the term "assets" now includes "intangible assets" in its definition;
  • companies are required to keep records of all accounting transactions;
  • it is allowed to submit tax documents to the fiscal authority in English;
  • accounting books and documents on real estate transactions must now be kept for 7 years (previously 15 years);
  • all legal entities are required to notify the UAE Tax Authority of any changes in accounting data within the prescribed timeframe;
  • the Fiscal Service has obtained the right to forcibly cancel the registration of firms in case of non-compliance with the criteria established by it;
  • all licensing authorities issuing trade permits are obliged to provide information on companies applying to them within 20 working days;
  • legal entities have been granted the right to register as a tax agent;
  • taxpayers will now be notified of upcoming audits 10 working days in advance.

New penalties

Resolution No. 75, which came into effect on August 1, regulates new penalties for late reporting and payment of income tax. Here are the main ones:

  • for failure of a business entity to comply with the requirements for filing information and keeping accounting records - 10000 dirhams, for repeated violation within the next two years - 20000;
  • for submission of documents and data on tax accounting not in Arabic language - 5000 dirhams;
  • for submitting an application for annulment of the company registration in violation of the deadline - AED 1000 for each overdue month;
  • for changing the company's registration data without notifying the tax authority - AED 1,000, for repeated violation within the next 2 years - AED 5,000;
  • for late payment of income tax - 14% per annum of the amount for each overdue month;
  • for submitting incorrect data in the tax return - AED 500 for correcting the submitted information after the deadline.

Contact the accountants of Intelligent Solution Group for accounting support services for your business in the UAE and you will get guarantees of compliance with the new tax procedures without violations, as well as save yourself from the risk of paying penalties.

Our accountants have extensive experience working within the framework of the Arab Emirates legislation and guarantee compliance with all tax regulations and accounting requirements in this state.