UAE: Tax procedure rules amended 2021

UAE: Tax procedure rules amended 2021 (continued)

This article continues to get you acquainted with the new amendments to the Tax Law Procedure in the UAE started in the previous article “UAE: New Key Amendments to the Federal Tax Procedures Law Effective Today 1 November 2021

Article (30) – Procedures for Submitting an Objection and Cases of Non-admission Thereof

  1. An objection to the Committee’s decision regarding the reconsideration application shall be submitted within forty (40) business days as of the date of notification of the Committee’s decision.
  2. The objection submitted to the Committee shall not be admitted in the following cases:
  3. a. If a reconsideration application was not submitted to FTA in the first place;
  4. b. If the tax associated with the objection is not paid; and
  5. c. If the objection is not submitted within the period specified in Clause (1) hereof.
    Article (32) – Implementation of Committee Decisions
  6. 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.
  7. Final decisions for disputes whose value exceeds one hundred thousand dirhams (AED 100,000) shall be considered to be writs of execution if they are not challenged before the competent court within a period of forty (40) business days following the date of notification of the outcome of the objection.
  8. The final decisions of the Committee, which have the power of a writ of execution, are implemented by the execution judge at the competent court in accordance with the provisions of the said Federal Law No. (11) of 1992.
    Article (32) bis – Special Procedures for Objection and Appeal
    As an exception to the provisions of Articles (29), (30), (31), (32) and (33) hereof, the Cabinet shall, upon recommendation of the Minister, issue a resolution to adopt an alternative mechanism for objection and appeal if the party to the dispute is a federal or local government authority specified in such decision. Until the Cabinet resolution is issued and implemented, the provisions stipulated herein regarding the objection or appeal of federal and local government authorities related to tax disputes shall apply.
    Article (33) – Procedures of Appeal Before Courts
  9. Without prejudice to the provisions of Articles (32) and (32) bis hereof, FTA and the person, as the case may be, may appeal against the Committee’s decision before the competent court within forty (40) business days as of the date on which FTA or the person, as the case may be, is notified of the Committee’s decision, in the following two cases:
  10. a. If the Committee’s decision is objected to in whole or in part;
  11. b. No decision is issued by the Committee regarding an objection submitted thereto in accordance with the provisions hereof.
  12. The competent court shall rule against the inadmissibility of the appeal against FTA in the following cases:
  13. a. There is a case of inadmissibility of the objection to the Committee, as stipulated in Clause (2) of Article (30) hereof.
  14. b. The person failed to submit evidence of payment of tax to FTA in accordance with the Committee’s decision, or the judgment of the court, as the case may be.
  15. c. The person failed to provide evidence of payment of no less than (50%) of the value of the administrative penalties prescribed in accordance with the Committee’s decision, or the judgment of the court, as the case may be, by paying in cash to FTA or by submitting an approved bank guarantee in favor of FTA.
  16. The Cabinet may, upon the recommendation of the Minister, make any amendments to the percentage stipulated in Paragraph (C) of Clause (2) of this Article.
    Article (46) – Controls for Installment, Exemption or Refunds of Administrative Penalties
    If FTA imposed or collected an administrative penalty from any person for violating the provisions hereof or the tax law, the committee stipulated in the second paragraph of this article may, upon the recommendation of the Director General, issue a decision approving the payment of the penalty amount in installments or the exemption or refund thereof in whole or in part, in accordance with the controls and procedures issued by a decision of the Council of Ministers based on a suggestion by the Minister.
    The Chairman of FTA’s Board of Directors shall issue a decision to form the Committee stipulated in the first paragraph of this Article under his chairmanship or the chairmanship of his deputy and with the membership of two members of the Board. The decision issued to form the Committee shall set out its mode of operations and how the meetings thereof shall be held.

The UAE is showing, inspiring and motivating leadership in giving top priority to nurturing the development and investment goals of the country and to the interests the country and its citizens. The recent amendments continue a series of amendments related to the Tax Procedures Law which the Government is introducing to resolve the ongoing tax disputes and facilitating the resolution mechanism for any future tax disputes.

It is very interesting to see the interplay of the recent amendments with the ongoing cases which are still being litigated before the various federal courts.

Challenge process

This latest development reinforces the necessity for taxpayers to adequately consider adopting appropriate strategies before or when pursuing tax challenges before the TDRC and Federal Courts, and align these with the new legislative developments. We at Pravo Management Consultancies have to date successfully assisted many clients to navigate these. We would be pleased to support you throughout the challenge process relating to your tax procedures.

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