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New procedure requesting reconsideration and objections of decisions

Abu Dhabi, October 31, 2021 – The Federal Tax Authority (FTA) has announced that it is to begin implementing new procedures for tax registrants who apply to the Authority for a review of their decisions, commencing  (November 1, 2021).

The procedures relate to tax registrants who apply for reconsideration of - or who submit objections to - the Authority’s decisions. They cover decisions made by the Tax Disputes Resolution Committee, challenge procedures, controls for paying by instalment, and the waiving of administrative penalties.

The Authority asserted that any person has the right to submit a request to the Authority to reconsider any decision or part thereof, it issued in connection to him, provided that the request includes reasons and meets the prescribed conditions, within 40 business days from the date he was notified of the decision.

The Authority will review the reconsideration request and issue a decision, giving their reasons within 40 business days from the date of receiving the application and informing the applicant of its decision within five business days from the date of issuance of the decision.

Additionally, the new amendments allow tax registrants to submit an objection to the Authority’s decision regarding applications of reconsideration to the Tax Disputes Resolution Committee. The objection submitted to the committee will not be admissible in three cases: if a reconsideration request has not been previously submitted to the Authority, if the tax in connection with the objection has not been settled, and if the objection is not submitted within 40 business days from the date of notification of the Authority’s decision.

According to the new amendments, the final decisions issued by the Tax Disputes Resolution Committee regarding disputes which do not exceed AED 100,000 shall be deemed as executory instruments. In contrast, the final decisions of disputes exceeding AED 100,000 shall be deemed as executory instruments if they were not appealed before the competent court within 40 business days from the date of notification of the outcome of the objection. The final decisions of the committee, which has the power of the executory instruments, shall be enforced through the execution judge at the competent court pursuant to the legal provisions.

The FTA confirmed that the new amendments advance a series of development and enhancement plans for tax legislation and procedures designed to facilitate objection to the authority’s decisions by extending objection periods for individuals, improve the efficiency of the tax system, further registrants’ confidence in it, and support taxpayers in fulfilling their tax obligations with easy and transparent procedures.

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Amendment on Tax Treatment

Abu Dhabi, October 30, 2021 – The Federal Tax Authority (FTA) has confirmed the importance of Cabinet Decision No. (88) of 2021 to amend Article 51 of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT), indicating the decision coming into effect as of today (Saturday, October 30, 2021).

The amendment in the tax treatment for the supply of goods in Designated Zones and their connected shipping or delivery services aim to avoid VAT Double Taxation on supplied goods in the Designated Zones and facilitate procedures to non-resident suppliers operating in the Designated Zones, as these goods will be treated - under certain conditions – outside the scope of tax, hence, no tax registration is required from the supplier.

The Federal Tax Authority issued ‘Public Clarifications’ in relation to the Cabinet Decision to amend Article 51, explaining the new amendment in the tax treatment for the supply of goods in Designated Zones and their connected shipping or delivery services, available on the authority’s website in an effort to raise tax awareness among business sectors and ensure the best tax compliance rates.

Designated Zones have been defined by a Cabinet Decision and must meet certain conditions for specific supplies. A full list of all 27 Designated Zones be accessed through the Authority’s website; the Zones are treated as being outside the territory of the UAE for VAT purposes.

According to the Authority’s “Public Clarification”, the supply of goods in the Designated Zone must be transacted outside the scope of UAE VAT, if said goods are not consumed inside the country, or in the case that the goods are consumed outside the Designated Zone, and provided that evidence is obtained and retained proving that the goods were delivered to a place outside the UAE or that VAT was paid on the import of these goods from the Designated Zone to the UAE. Shipping and delivery services of Qualifying Goods is also outside the scope of UAE VAT if they are supplied by the same supplier of the goods, under certain conditions, including the supplier being a non-resident who is not registered for VAT in the UAE.

The Public Clarification offered a detailed explanation and guidelines on implementing the Amendment of Article (51) of the Cabinet Decision regarding the Executive Regulations of the Federal Decree-Law on Value Added Tax.

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Growth in VAT Refund Applications

Abu Dhabi, October 18, 2021 – The Federal Tax Authority (FTA) has processed more than 9,640 requests to recover Value-Added Tax (VAT) incurred by UAE nationals on building their new residences by September 2021 – more than 107.1% growth from the figure reported in the first nine months of 2021 compared to the total number of processed requests until the end of 2020.

In a press statement issued today, the Authority highlighted official statistics, which reveal that in the first nine months of 2021, over 4,984 applications from citizens requesting a refund of the VAT they incurred on building their new residences were approved, up from the 3,147 requests completed in 2020, 1,399 applications processed in 2019, and just 110 requests in 2018 – the year the VAT Refund Scheme for UAE Nationals Building New Residences was launched.

FTA Director General His Excellency Khalid Ali Al Bustani attributed the massive growth in the number of citizens benefiting from the Scheme to the developments the Authority has made to the process and the wide-reaching awareness campaigns it has implemented since the launch. “The Federal Tax Authority will continue to streamline the process for UAE citizens eligible for a VAT refund, allowing them to submit their requests on the FTA website,” he asserted. “This is in line with the UAE leadership’s vision to develop a modern housing system that caters to citizens’ needs and offers them the best quality of life available.”

“The Authority launched the Online Platform for UAE Citizens’ VAT Refund Requests on Building New Residences,” H.E. continued. “The FTA coordinated with certain housing programmes that implement its required procedures and provide expenditure data. The objective was to reduce the audit requirements for VAT refund applications submitted by UAE citizens. The programmes will, for their part, collaborate with the FTA to provide the necessary assurances to support refund requests.”

The Authority intensified its efforts to raise awareness and familiarise UAE citizens with its e-Services, launching an Online Platform for Processing VAT Refund Requests from UAE Citizens on Building New Residences on the official FTA website, in an effort to facilitate and expedite the process. Additionally, the Authority has launched the ‘Your Voice is Heard’ initiative, which includes new services that offer UAE nationals new, broader, and more diverse sources of information regarding procedures to recover the VAT they incurred on building their new residences via the quick and user-friendly e-Services portal on the FTA official website.

The initiative included four services that aim to raise the target audience’s awareness. The ‘Virtual Session’ is a weekly interactive virtual workshop that allows UAE citizens to receive consultations and clarifications about the VAT refund process. In addition, the initiative offered a ‘Personal Assistant’ service, where applicants can book an appointment to communicate directly with FTA employees about the refund process and the legal requirements for VAT incurred on building new residences for Emirati nationals, allowing them to expedite the procedures.

The initiative also provided a series of remote, web-based interactive sessions to gauge citizens’ feedback, remarks, suggestions, and preferences regarding the VAT refund process for UAE nationals on building new residences. In addition, the initiative offered a series of videos and a newsletter titled ‘VAT Refund on UAE Nationals Building New Residences’ published on social media channels and via SMS. The content will explain the VAT refund procedures for UAE nationals building new residences, from submitting the request along with the required documents to receiving the refunded amount in the applicant’s bank account.

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