November 2022 United Arab Emirates Tax News

Introduction of statutory criteria to determine Tax Residency for natural and legal persons

The UAE government vide cabinet resolution No. 85 of 2022 has issued guidelines to determine tax residency for natural and legal persons in the country. This regulation will be effective from 1 March 2023 and yet to be published in official gazette.

A legal person is considered a tax resident in the UAE if it was established, formed, or registered in accordance with the legislation in force in the UAE and does not include the branch of a foreign legal entity.

A natural person is considered a tax resident in the UAE if, any of the following conditions are met: -

his usual or principal place of residence, the center of financial and personal interests is in the UAE or meets other conditions specified by a decision of the Minister

he is physically present in the UAE for 183 days or more during relevant 12-month period

UAE National, GCC National or person holding valid residency permit in the UAE, if he is physically present in the UAE for 90 days or more, during 12-month period and has a permanent place of residence or does job or business in the UAE

The United Arab Emirates (‘UAE’) Federal Tax Authority to launch a New Integrated Platform, ‘EmaraTax’

On October 11, 2022, the UAE Federal Tax Authority announced the launch of an online platform called ‘Emara Tax‘ which significantly enhance the way that taxpayers access the FTA’s services, pay their taxes, obtain refunds and also alerts regarding pending actions, such as tax returns that need to be submitted, payments that are outstanding, etc.

Over the course of the next few weeks, the FTA will release more information about the features of EmaraTax and how to transition to the new system.

Amendment of the VAT Law

The Federal Tax Authority of the UAE has amended certain provisions of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (‘UAE VAT Law’) vide Federal Decree-Law No. 18 of 2022.

These amendments would be effective from 01 January 2023.

Introduction of MAGNATI

The Federal Tax Authority will start accepting MAGNATI as a new payment method for paying tax liabilities instead of eDirham, which will no longer be a payment option starting from 30 October 2022.

Magnati, the fully owned payments subsidiary of First Abu Dhabi Bank (FAB), is at the cutting edge of the digital payment landscape in the UAE and is setting a new standard for innovation and delivery.

Amendment in Excise Tax Law and release of Public Clarification

The Federal Decree Law No. 19 of 2022 has been released amending few provisions of Federal Decree Law No 7 of 2017. These amendments are detailed in the Public Clarification EXTP009.

The major updates to the law are registration exception for persons importing excisable goods for purposes other than for business, requirement to settle with FTA any amount being collected as Excise Tax, and the timelines for conduct of Tax Audit and issuance of Tax Assessment.

The new Federal Decree-Law includes other amendments as well. In accordance with the Decree, the amendments are effective from 14th October 2022.

Extension of temporary suspension on Ferrous scrap and wastepaper

The Dubai Customs has extended the temporary suspension of Export of ferrous scrap and wastepaper vide Customs Notice No. (08/2022). The export of ferrous scrap and paper waste under certain HS codes have been prohibited till 19 March 2023.

Extension of Increased Import Duty

The increased import duty of 10% will continue to be applicable on rebar and Wire rod as per Customs Notice No. (10/2022) issued on 20 October 2022.

Introduction of anti-dumping duty on GCC import of electric accumulators

The Dubai Customs vide Customs Notice No. (09/2022) has imposed definite anti-dumping duty on GCC imports of electric accumulators of kind used for starting piston engines between 32 to 225 amps, falling under HS code 85071000 and originating in or exported from Turkey and India. The percentage to calculate duty has also been mentioned in the notice, which will apply for a period of 5 years effective from 1 October 2022.

New tax treaty between the UAE and the Czech Republic to be Signed

On 19 October 2022, the Czech government approved signing a new income tax treaty with the United Arab Emirates.

UAE Cabinet approves the pending Kuwait Tax Treaty

On 10 October 2022, the United Arab Emirates Cabinet approved the pending income tax treaty with Kuwait.

Gabon Ratifies Pending Tax Treaty with the UAE

On 16 October 2022, Gabon published the law for the ratification of the pending income tax treaty with the United Arab Emirates. The treaty, signed 1 March 2019, is the first of its kind between the two countries and includes new Article 31 on when will the agreement enter into force.

Corporate Tax