Legislation Details
- Full Title: Federal Decree-law Establishing Federal Tax Authority
- Law Type: Federal Decree-Law
- Law Number: [number] of 2016
- Issued Date: 26 Sep 2016
- Effective Date: 28 Dec 2016
- Official Gazette: No. 604
- Sector: Government Affairs
- Status: Active
- Number of Articles: 51
- Chapters/Parts: 0
- Amendments: 1
Summary
This Federal Decree-Law establishes the Federal Tax Authority (FTA) in the United Arab Emirates. The FTA is responsible for administering, levying, and implementing federal taxes and related fines, as well as distributing their revenues and enforcing applicable tax procedures across the UAE. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 2, 4) The FTA has financial and administrative independence, and its mandate includes combating tax evasion, avoiding double taxation, and coordinating with federal and local government entities on tax matters. The law outlines the FTA's organizational structure, management, and financial affairs, including provisions for its budget, revenues, and accounting. It also specifies the FTA's key powers and responsibilities in relation to taxpayers, tax registration, audits, and dispute resolution. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 2-18)
What is the scope and purpose of this law?
The purpose of this Federal Decree-Law is to establish the Federal Tax Authority (FTA) as a financially and administratively independent federal entity responsible for managing, collecting, and implementing federal taxes and related fines in the United Arab Emirates. The law grants the FTA broad powers to administer the federal tax system, including registering taxpayers, auditing tax declarations, and enforcing tax procedures and penalties. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 2, 4) The FTA's geographic scope covers the entire UAE, and it is empowered to set up branches and offices across the country. The law applies to all taxpayers who are subject to federal taxes imposed by virtue of federal legislation. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 3, 4)
What are the key definitions under this law?
Article 1 of the Federal Decree-Law provides the following key definitions:
- State: The United Arab Emirates
- Federal Government: The government of the UAE
- Emirates Governments: The local governments in each Emirate
- Ministry: The Ministry of Finance
- Authority: The Federal Tax Authority
- Board: The FTA's board of directors
- Taxpayer: Any person who pays federal taxes
- Federal Taxes: Taxes imposed by virtue of a federal law
- Tax Law: Any federal law that imposes a federal tax
- Related Fines: Fines related to the federal tax
- Tax Evasion: The use of illegitimate methods to avoid paying a due tax
- Double Taxation: The case where tax is imposed multiple times on the same taxpayer and income
(Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 1)
What are the main obligations and requirements?
The Federal Decree-Law imposes the following key obligations: 1. Taxpayers must comply with their obligations under federal tax laws and regulations. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(a)) 2. Taxpayers must provide the FTA with any data, information, or documents requested for tax audits and investigations. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(p), (s), (t)) 3. The FTA must administer, levy, and implement federal taxes and related fines, and distribute their revenues. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)) 4. The FTA must avoid cases of double taxation and combat tax evasion in cooperation with relevant entities. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(d)) 5. The FTA must coordinate with the federal and local governments, as well as taxpayers, on all issues related to federal taxes. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(j))
What licensing, registration, or approval requirements exist?
The Federal Decree-Law grants the FTA the power to "decide on applications for registration in the existing tax systems in the State, and allocate tax numbers for registration in these systems." (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(e)) However, the law does not specify any detailed licensing, registration, or approval requirements.
What rights and protections does this law provide?
The Federal Decree-Law does not explicitly outline any specific rights or protections granted to taxpayers or other parties. However, it does state that the FTA must "enforce a mechanism for settling disputes between the taxpayer and the Authority, in accordance with the applicable legislations." (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(r)) This suggests that taxpayers have the right to dispute decisions or actions taken by the FTA through an established dispute resolution process.
Which authorities or bodies are responsible for enforcement?
The key authorities and bodies responsible for enforcement under this law are: 1. The Federal Tax Authority (FTA): The FTA is the main entity established by this law to administer, levy, and implement federal taxes and related fines in the UAE. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 2) 2. The FTA Board of Directors: The Board is the highest governing body of the FTA, responsible for setting its general policy, overseeing its performance, and issuing necessary regulations and decisions. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 5, 6) 3. The FTA Director General: The Director General is appointed by federal decree and is responsible for managing the FTA's technical, administrative, and financial affairs, as well as implementing the Board's decisions. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 7, 8) 4. The Ministry of Finance: The Ministry plays a role in proposing tax-related legislation, providing recommendations to the Cabinet, and coordinating with the FTA. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(f), 6(2), 15(2))
What are the penalties for non-compliance?
The Federal Decree-Law does not specify any penalties for non-compliance. It only states that the FTA is responsible for "enforcing the applicable laws and regulations with regard to federal taxes and related fines." (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(a)) The actual penalties for violations would be outlined in the relevant federal tax laws.
What fees, charges, or financial provisions are specified?
The Federal Decree-Law outlines the following key financial provisions: 1. The FTA's financial resources include revenues from the services it provides, amounts deducted from federal tax revenues to cover its expenses, loans from the federal government, and other sources like donations and bank deposit returns. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 12) 2. The FTA's financial surpluses from any fiscal year are carried forward to cover its approved budget for subsequent years. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 9(2)) 3. The FTA's funds are considered public funds and are exempt from all taxes and fees. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 10) 4. The mechanism for sharing federal tax and fine revenues between the federal and emirate governments is to be determined by Cabinet resolution. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 15)
What exemptions or exceptions apply?
The Federal Decree-Law does not specify any exemptions or exceptions from its scope of application. It applies broadly to the administration of federal taxes and related fines across the UAE.
How are disputes resolved under this law?
The Federal Decree-Law states that the FTA must "enforce a mechanism for settling disputes between the taxpayer and the Authority, in accordance with the applicable legislations." (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 4(1)(r)) However, the law does not provide any further details on the specific dispute resolution procedures or mechanisms.
What are the key deadlines and time limits?
The Federal Decree-Law does not specify any deadlines or time limits, apart from stating that the FTA's fiscal year begins on January 1 and ends on December 31 each year. (Federal Decree-law Establishing Federal Tax Authority, 2016, Art. 11)
How does this law interact with other UAE legislation?
The preamble of the Federal Decree-Law lists several other federal laws that it is issued in relation to, including laws on: - Competencies of ministries and powers of ministers - Imposing federal customs on tobacco imports - Civil transactions - Penal code - Code of evidence - Civil procedure - Pensions and social security - Combating money laundering and terrorism financing - Reorganization of the Audit Institution - Regulating the profession of auditors - Commercial companies - Federal Customs Authority However, the Decree-Law does not specify how it interacts with or amends these other laws. It only states that it is issued "on the basis of" these related laws. (Federal Decree-law Establishing Federal Tax Authority, 2016, Preamble)
When did this law come into effect?
The Federal Decree-Law Establishing the Federal Tax Authority came into effect on 28 December 2016, the date specified as its effective date. (Federal Decree-law Establishing Federal Tax Authority, 2016, Effective Date) The law was published in Official Gazette No. 604 on 29 September 2016. (Federal Decree-law Establishing Federal Tax Authority, 2016, Official Gazette Date) The law does not contain any transitional provisions or specify a grace period for implementation.
Source Documents
This article analyses Federal Decree-law Establishing Federal Tax Authority for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.