Wednesday, Jun 07, 2017
Abu Dhabi: The Federal National Council (FNC) on Tuesday approved changes to a draft law that serves as a framework for issuing tax-related laws.
The Tax Procedure Bill shall regulate the procedure of assessing, collecting and controlling public revenue it applies to, in addition to setting out the rights and obligations of taxpayers, registration of taxpayers, and tax offences and violations. This draft law shall also apply to fines, interest on the basis of due but unpaid tax and the costs of the enforced collection.
The changes make the decisions issued by a dispute resolution committee, on cases whose value does not exceed Dh100,000, final. They also stipulate that federal courts will have jurisdiction to decide on other cases.
The Federal Tax Authority (FTA) recently announced a selective tax of 100 per cent on tobacco and energy drinks, and 50 per cent tax on carbonated beverages. The taxes will be applied in the fourth quarter of this year.
The FTA announcement was made during the authority’s first meeting chaired by Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
The value-added tax (VAT) rate was set at 5 per cent and will be implemented on January 1, 2018. Shaikh Hamdan said that the VAT rule was introduced by the authority to achieve economic diversification, in preparation for the post-oil era.
He added that the tax procedures law is in its final phase and will soon be issued and published. The VAT law is currently being debated by the technical legislative committee in preparation for its submission before Cabinet for approval, while the selective tax draft law will soon be discussed by the committee, Shaikh Hamdan said.
International transportation, commodities and exports, health and education services, and gold imported for investment purposes are exempted from taxes.
Also exempted are residential buildings for sale or lease during the first three years in which the building is completed, some financial services and empty plots of land.
All business that meet the minimum annual income of Dh375,000, as confirmed by their financial records, are required to register with the VAT system. The deadline for registration will start in the third quarter of 2017, but will be fall due in the fourth quarter. Businesses with an annual income of Dh187,500 and above have the option of registering with the system.
There are currently more than 450,000 privately-owned companies in the UAE, and the number is expected to soon reach 600,000.
By Samir Salama Associate Editor
Gulf News 2017. All rights reserved.
