Tax Awareness ... A Step Towards Enhancing Confidence in Investments

Guided by the vision and directives of the wise leadership, the United Arab Emirates has strengthened its position as a major economic focal point, not just from a regional perspective but on the global stage as well.

 

Over the past years, ongoing legislative and executive actions and decisions have contributed to enhancing investors' confidence levels in the efficiency and quality of the business environment in the country, thus boosting investments and competitiveness in the business sector in the UAE while reflecting and aligning with the country's strategy on economic diversification and sustainable growth.

 

Given the high demand from investors wishing to establish businesses in various sectors in the country and taking advantage of the incentives and facilities introduced by the UAE government to boost investments, it became crucial to accurately identify the tax requirements and obligations of businesses at the very beginning of any venture, in order to ensure that tax laws and regulations are not violated or overlooked.

 

Since its establishment, the Federal Tax Authority has recognized the importance of tax awareness and its role in enhancing trust in the investment environment, hence it has sought to provide the highest standards of transparency by holding a large number of awareness campaigns that have benefited tens of thousands of business people all over the UAE.

 

Within that framework, the FTA also published hundreds of public and priVATe tax clarifications and dozens of tax guides and manuals via its website, along with e-learning modules, tutorial videos, and infographics to clarify and simplify tax procedures, enhance tax awareness and increase tax self-compliance rates.

 

The FTA emphasizes the important requirements for achieving tax compliance in general, and for new businesses in particular; most notably, the need to conform with the mandatory registration criteria, meaning that if the taxable supplies exceeds AED 375,000 over the previous 12 months, or is expected to exceed that threshold within the subsequent 30 days, he or she is obligated to register for VAT through the FTA's website. Alternatively, if the taxable supplies exceeded AED 187,500 over the previous 12 months, or is expected to exceed that threshold within the subsequent 30 days, he or she can register voluntarily. If the taxable supplies add up to less than this, they are under no obligation to register for tax.

 

If the above registration criteria apply, it is an obligational duty to keep proper financial and accounting records, along with all documents relating to legally defined business activities, for a period of at least 5 years. The VAT registration process is simple and can be carried out easily by following few well-explained steps on the FTA e-Services portal that is available 24/7.

 

Compliance with these requirements contributes to eleVATing the efficiency of investment management, while ensuring that the fiscal system's objectives aimed at diversifying sources of income are met by providing sustainable resources to finance strategic development projects, such as infrastructure development, and therefore achieving higher levels of wellbeing and comfort for citizens and residents.

 

His Excellency Khalid Ali Al-Bustani

Director-General of the Federal Tax Authority

www.tax.gov.ae