The UAE Ministry of Finance on Saturday outlined new penalties and procedures relating to corporate tax.
The penalties have been designed and benchmarked to ensure successful implementation and compliance of the Corporate Tax Law without burdening UAE businesses that comply with the new regulations, Wam reported. They come into effect on August 1.
Younis Haji Al Khoori, undersecretary at the Ministry of Finance, said: “Adhering to corporate tax compliance is a responsibility of all taxable persons to support the implementation of the corporate tax system in the UAE, which is in line with the highest global standards.
“It also drives sustainable economic growth in the UAE by providing a conducive legislative environment that promotes tax compliance.”
Under a Cabinet decision, penalties will be imposed on those who do not comply with their obligations under the UAE Corporate Tax Law.
Penalties will be applied in cases of failure to file and pay corporate tax due on time, including failing to inform the Federal Tax Authority of changes that might require amendments to tax records. A new structure has also been introduced for voluntary disclosure penalties.
Penalties also apply in cases of failing to properly keep records or failing to submit the required records and other information specified in the corporate tax law.
The Ministry of Finance also announced a Cabinet decision stipulating additional conditions that investment funds must meet to be exempt from corporate tax.
Mr Al Khoori said: “The additional conditions set forth through this new Cabinet decision are clear and simple to apply, and serves the UAE to retain its position as a leading investment hub. This Cabinet decision balances the UAE remaining competitive as an investment hub, while maintaining the integrity of the corporate tax system.”
The Ministry of Finance also said on Saturday that a Cabinet decision repealed the existing Executive Regulation on Tax Procedures and replaced its processes under the New Tax Procedures Law in force since March.
The new Cabinet decision stipulates the accounting records and commercial books to be maintained as well as the period and manner of record-keeping, and other regulations, Wam reported.