The Board of Directors of the Federal Tax Authority, FTA, has issued a number of executive decisions concerning the Authority’s operations and administrative policies during its 8th meeting, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and FTA Chairman.
During the meeting, held on Tuesday at the Ministry of Finance’s Dubai headquarters, the Board reviewed a report on the developments of ongoing projects and the FTA’s recent achievements. The report also covered results pertaining to its registration processes for VAT and excise tax and transactions related to filing tax returns, payment of outstanding taxes and collection of recoverable taxes.
The report pointed out that the level of tax compliance in the country has increased, with the number of registrants for VAT exceeding 300,000 registered businesses – tax groups and individuals. Meanwhile, the number of registrants for excise tax reached 719, and the number of approved tax agents increased to 316.
The report confirmed the success of the VAT Refund Procedures for UAE Nationals Building New Residences, with many citizens benefiting from the simple and straightforward electronic procedure that enables them to claim refunds on the taxes incurred on the construction of their new villas and apartments. The study noted that 235 applications were approved, enabling citizens to recover a total of AED9.76 million.
Sheikh Hamdan bin Rashid commended the positive results and major strides the Authority has made since its inception. The FTA saw to the implementation of simple and clear cutting-edge electronic systems, leading to encouraging compliance levels from business sectors. This success was the result of streamlined procedures, an advanced legislative environment, and adherence to high international standards and best practices.
"The Federal Tax Authority has developed comprehensive plans to encourage tax compliance, raise the registration rate among Taxable Businesses, and combat tax evasion," His Highness explained. "The Authority is also stepping up its efforts to help businesses – who we consider to be strategic partners – fully comply with tax regulations and procedures with little to no effect on their activities. With that in mind, we regularly organise awareness and consultative meetings to help private-sector entities across all industries efficiently implement the tax system."
"As part of the Authority’s efforts in that regard, more than 35 meetings were organised with business groups and representatives of the concerned sectors," Sheikh Hamdan added. "The FTA is currently creating new campaigns, most notably ‘Your Tax Invoice: Your Right’, which was launched during the first quarter of 2019 to promote the use of Tax Invoices across all business operations. This initiative is in conjunction with the Tax Clinic, which was launched in August 2018 and seeks to establish direct communication with businesses, continuing throughout all seven emirates to raise awareness and to flag obstacles that can be resolved immediately."
Sheikh Hamdan stressed that the Authority strives to provide the necessary environment, infrastructure, and legislation to ensure ease of doing business and the growth of all economic sectors in the UAE, reiterating that these efforts aim to cement the UAE’s position as a major regional and international economic hub, and encourage businesses to contribute to the growth of the national economy.
Furthermore, the Board explored statistics regarding the Public Clarifications published through the FTA’s website. The data showed that a total of 205 Clarifications were issued, 184 of whom tackled specific cases, while 21 were General Clarifications.
The report also included a performance analysis of Tax Refund Schemes for legally eligible groups, including the digital system of the Tax Refunds for Tourists Scheme, which was introduced in November 2018 and became fully operational less than one month following the launch of the first phase. The Board adopted regulatory decisions and policies regarding monetary refunds for tourists, which has recorded nearly 6,000 refund transactions per day.
The report also revealed that the FTA has completed its preparations to launch the VAT Refunds for Business Visitors Scheme, whereby, starting Monday, 2nd April, foreign businesses can apply for a refund on taxes incurred on the import and export activities of Persons not residing in the UAE but based in countries that implement VAT refund schemes, or who are not taxable. The scheme aims to reciprocate the efforts made in countries that offer VAT refunds to visiting UAE businesses.
The Board followed up on the developments of the Marking Tobacco and Tobacco Products Scheme, which became applicable to cigarettes in January of this year. The scheme banned the import of all cigarette brands that do not carry ‘Digital Marks’ into the UAE starting May 2019, while the sale of such products will be prohibited across all local markets as of August. Training workshops for customs employees and inspectors at Economic Development Departments have been successfully completed in all emirates, ensuring their readiness to carry out inspections and implement regulatory procedures, in accordance with the requirements of the new Scheme.
The Board additionally approved the FTA’s plan to launch the second phase of the Marking Tobacco and Tobacco Products Scheme, which will be expanded to include all tobacco products, whether imported or locally produced and traded, including shisha.