Online registration for VAT effective mid-September

An online registration on tax purposes for businesses will be open effective mid-September 2017, according to the Federal Tax Authority, FTA, with an integrated system to be provided to serve the business sectors as per the highest international standards.

This marks a major step underlining the UAE’s leading position in the application of a world-class tax system, FTA announced Tuesday.

The announcement was made at a media briefing by the FTA to familiarise them on all aspects of the FTA's work and the functions it will undertake in the coming period. The FTA also briefed media on the implications of the tax procedures for boosting the momentum of the UAE's sustainable economic development, building the future economy and continuing to provide high quality services.

Khalid Ali Al Bustani, Director General of FTA, said: "The UAE has reached a very advanced stage regarding the legislative aspects of the tax system that is among the best in the world. Through the Ministry of Finance, which is authorised to issue tax legislation and policies, the Tax Procedures Law was issued earlier, to govern the relationship between the FTA and the taxable persons."

"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," he added.

"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 achieved important milestones in implementing the highest and best international standards. 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."

He explained that 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.

"The tax laws and procedures will strengthen the UAE's economic development and enable it to be a real competitor among the world's advanced economies. This will be led by providing resources to support the expansion of key sectors that are related to the community, and providing the best services, especially in the fields of healthcare and education, and infrastructure projects," he added.

Al Bustani noted 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 x 7, and will offer all the relevant information on the UAE taxes.

"As part of the FTA’s procedures, we are committed to provide business sectors with the best services and a suitable and advanced environment to register their businesses in an easy and convenient manner. 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." Al Bustani 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. 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 in addition to the tax procedures regulations. 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. Up to 24 awareness workshops were conducted and witnessed remarkable participation by more than 15,000 companies from different business sectors operating nationwide," he said.

Al Bustani added, "We have recently launched the second phase of the tax system’s awareness plan, which focuses on conducting 21 specialised workshops on the VAT and excise tax treatment of the different business sectors, in co-operation with institutions and government authorities including the Chambers of Commerce and Industry. The workshops will specifically address the retail sector, real estate, imports and exports, and the financial services and insurance. Through these, we aim to communicate with the business sector and encourage them to ensure early registration for tax purposes."

"We will work to ensure business readiness for the VAT and Excise Tax systems, which are focused on supporting economic diversification by diversifying government revenue sources. Our plan also includes several initiatives and awareness campaigns for different audiences, consumer segments and the UAE community. At a 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."

He explained: "Tax is a new concept in the UAE community and the region. It is important to emphasise 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 percent 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."

Al Bustani thanked all government institutions and authorities in the UAE for working with the FTA to reach all business sectors and introduce them to the tax laws and procedures.

"The UAE's tax procedures and law are the result of in-depth studies of all options to provide new financing sources that will enable the government to continue to develop a future-based infrastructure, and ensure the continuous quality improvement of government services. This is done to achieve the vision of the UAE’s wise leadership on providing all means to make the community happy," he added.

Al Bustani said that the FTA is working to attract and qualify UAE youth in the new field of taxation, with special programmes being put in place to educate and qualify FTA employees to carry out the FTA's functions and responsibilities and further improve performance.

Earlier in 2016, President His Highness Sheikh Khalifa bin Zayed Al Nahyan 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.

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