UAE: Amendment of certain provisions of the Tax Procedures Law in relation to tax disputes resolution

In detail

The new Decree Law has introduced the following amendments to the Tax Procedures Law that entered into force as of 1 November 2021:

1. Extension of timelines related to tax dispute resolution
Amendment of Articles 27, 30 and 33 of the Tax Procedures Law as follows:

• Procedures for application for reconsideration (Article 27)

  • The timeframe for any person to submit a reconsideration request to the FTA has been extended to 40 business days (previous timeline of 20 business days);

  • The timeframe for the FTA to review the reconsideration request and issue a decision has been extended to 40 business days (previous timeline of 20 business days).
    
    

• Procedures for submitting objections and cases of inadmissibility (Article 30)

  • The timeframe to submit an objection to the FTA’s decision to the respective Tax Disputes and Resolution Committee (TDRC) in respect to a reconsideration request has been extended to 40 business days (previous timeline of 20 business days).
    

• Challenge procedures before Courts (Article 33)

  • The timeframe for the person and the Authority to submit an appeal to the TDRC’s decision before the competent Court has been extended to 40 business days (previous timeline of 20 business days).

2. Amendment of requirements to submit objections and appeals
Amendment of Articles 30 and 33 of the Tax Procedures Law as follows:

• Requirements to submit objections to Committees (Article 30)
  The requirement for settlement of taxes and penalties prior to filing an objection to the FTA's decision has been amended to include the settlement of taxes only (not the penalties anymore).
  
  

• Requirements to submit appeals to Courts (Article 33)
  A new clause was introduced to Article 33 to provide the instances where the appeal is considered as inadmissible. These instances are as follows:

1. Existence of inadmissible case to file an objection with the TDRC;

2. Failure of the person to provide proof of payment of taxes to the FTA; and 

3. Failure of the person to provide proof of payment of no less than 50% of the administrative penalties by means of cash payment or submission of bank guarantee to the FTA. 

3. Enforcement of TDRC' decisions
Amendment to Article 32 of the Tax Procedures Law as follows:

• The decisions of disputes issued by the TDRC exceeding AED 100,000 shall be considered as exclusionary instruments if not appealed before the competent Court within 40 business days of notification of the outcome of objections (previous timeline of 20 business days);

• If the parties of dispute are federal or local government entities, the Cabinet shall issue a decision adopting an alternative mechanism of objections and appeal. Until then, the current mechanism shall apply [Article 32 (bis)].

4. Special waiver committee
Amendment to Article 46 of the Tax Procedures Law as follows:

• The special waiver committee has been given additional powers in approving instalments of the penalty amount or refund it to the person according to the controls and procedures of a Cabinet Decision to be issued according to a suggestion by the Minister;

• The structure of this committee has been clarified. The committee shall be formed by a decision issued by the Chairman of the Board of the FTA. The Committee is chaired by the Chairman of the board of the FTA or his deputy, with the membership of two board members.