Amendments: Federal Decree-Law on Tax Procedures No. 7 of 2017

The UAE Cabinet of Ministers has issued the Federal Decree-Law No. 28 of 2021 on 16th September 2021, amending Federal Decree-Law on Tax Procedures No. 7 of 2017, relating to tax dispute and resolution in the UAE, through Amending of Articles 27, 30, 33 and 46 of the Tax Procedures Law.

Effective date

The new amendments shall be effective from 1st November 2021.

Introduction

The Federal Tax Authority (FTA) started implementing new tax procedures to facilitate for tax registrants to submit their reconsideration requests and objections to the FTA’s decisions, for implementing the decisions of the Tax Dispute Resolution Committee (TDRC), appeal procedures, controls for reducing administrative penalties, the payment of penalties over instalments and exempting penalties.

Summary of amendments/changes

1. The timeframe for submitting reconsideration requests, objections before the Federal Tax Authority (FTA), Tax Dispute Resolution Committee (TDRC), and appeals before Competent Courts have been extended/increased from 20 to 40 business days.
2. The FTA has to review the reconsideration request and issue its decision within 40 (the previous timeline was 20 business days) business days from the date of receiving the applications and should inform the applicant of its decision within five business days from the date of issuance of the decision. In its decision, the FTA will have to explicitly state reasons for making such a decision.
3. If the Objection before TDRC is not filed within 40 business days from the date of being notified of a reconsideration decision by the FTA, it will not be admissible.
4. Only the tax amount (as against tax and penalties previously) should be deposited for admissibility of the case When submitting an objection before TDRC.
5. A final decision issued by the Committee in disputes whose value does not exceed one hundred thousand dirhams (AED 100,000) shall be considered a writ of execution.
6. A final decision issued by the Committee in disputes whose value exceeding AED 100,000 should be deemed as executory instruments if they were not appealed before the Competent Courts within 40 (the previous timeline was 20 business days) business days from the date of notification of the outcome of the objection.
7. If the parties of dispute are federal or local government entities, the Cabinet shall adopt an alternative mechanism of objections and appeal. Until then, the current mechanism shall apply.
8. A pre-condition for filing an appeal before the Competent Courts were introduced to Article 33, which is a proof of payment of no less than 50% of penalties (or as may be decided by the Competent Courts), to be paid either by way of cash transfer or bank guarantee.
9. Amendment to Article 46, Cases for a waiver, refund and payment in instalments of administrative penalties to be reviewed and approved by a special committee (previously by the FTA). The separate decision by the Chairman of the Board of the FTA shall set out the formation of the Committee.