Introduction – Closing Provisions under UAE Corporate Tax
The closing provisions details the supplementary part of a legislation and addresses the miscellaneous aspects of a legislation such as publication of the Act, administrative policies, delegation of powers and so on.
Article 62: Delegation of Powers under UAE Corporate Tax Law
Delegation of powers means to transfer some or all of the powers to a subordinate authority.
Under the UAE Corporate Tax Law, the power rests with the Minister of Finance for overseeing the Corporate Tax regime. However, the legislation provides for the delegation of powers by the Minister to the Federal Tax Authority, in cases where the Minister deems appropriate.
The delegation of powers as provided can either be a:
- Full/ Complete Delegation of Powers
- Part Delegation of Powers
Article 63: Administrative Policies and Procedures under the UAE Corporate Tax Law
Under the provisions of the UAE Corporate Tax Law, the Authority shall determine the administrative policies, procedures, and processes with respect to the compliances to be followed by a Person under the Corporate Tax Law.
Such compliances include the structure of tax returns and the information that must be revealed to the Authority at the time of tax return filing, and the procedures that must be adhered to by businesses while filing their tax returns.
Article 63 also mandates that these administrative policies, procedures, and processes shall be determined by the Authority in consultation with the Ministry. This ensures there is coordination between the intent of the policy and how such policy is practically implemented.
Article 64: Cooperation between the Government Authorities and the Federal Tax Authority under the UAE Corporate Tax Law
To ensure the smooth functioning of the UAE’s Corporate Tax Law, the Law mandates government authorities to cooperate with the Federal Tax Authority. To that purpose, it directs the government authorities to:
- Facilitate the Authority in the effective administration and enforcement of the UAE Corporate Tax Law; and
- Furnish any details which may include data, documentation or any such information that the authority might need in the course of administering and enforcing the Corporate Tax Law.
Article 65: Revenue Sharing between the Local Governments and the Federal Government under the UAE Corporate Tax Law
This provision details the appropriation of revenue collected from UAE’s Corporate Tax regime. It states that:
- Revenue Sharing: These revenues are to be shared collectively between the Local Governments and the Federal Government.
- Issue of a Federal Law: For the purpose of revenue sharing, a federal law will be issued to deal with the matter specifying the sharing of revenues.
The revenue sharing provision aids in mitigating any possible future conflicts between the Federal and Local Governments and allows for distribution of funds both at the local and Central level.
Article 66: Conflict between provisions of International Agreements and the UAE Corporate Tax Law
This provision allows for precedence of International Agreements ratified by the UAE over the provisions of the new UAE Corporate Tax Law. It states that in case of any inconsistency between the provisions of any international agreement and the Corporate Tax Law; the provisions of the international agreement will be applicable.
Article 67: Implementing the provisions of the UAE Corporate Tax Law
- The Ministry and the Federal Tax Authority
- The Cabinet, on the suggestion of the Minister
may issue appropriate implementing decisions. They may be issued from time to time, for effective and smooth implementation of the provisions of the Law.
Article 68: Cancellation of Conflicting Provisions under the UAE Corporate Tax Law
If there is any dispute or conflict or inconsistency with any of the provisions of the UAE Corporate Tax Law, then they will be abrogated or repealed or removed.
Significance of the provision
If there is any kind of conflict or dispute as to a previous provision and the provision in this Corporate Tax Law, the one in the UAE Corporate Tax Law will supersede the provisions of any other legislation. This aims at reducing any confusion and ensures that frivolous disputes do not come before the Federal Tax Authority.
Article 69: Application to Tax-Periods of the UAE Corporate Tax Law
A Tax Period is one for which the Tax Return is to be filed by the taxpayer or the Taxable Persons.
The provision deliberately provides that the UAE Corporate Tax Law will have its applicability to Tax Periods beginning on or after June 1, 2023.
This clearly states the Tax Period from which the provisions of the UAE Corporate Tax Law will become applicable to Taxable Persons on a rolling basis, and the time of their entry into the Corporate Tax Regime shall depend on the Financial Year they follow (which is the period for which the Person prepares their financial statements).
There shall be two dates of commencement:
- Persons that prepare their Financial Statements as per the Calendar Year shall be subject to Corporate Tax from January 1, 2024;
- Persons who prepare their Financial Statement for the period 1st June 20XX to 31st May 20XX, shall be subject to the Corporate Tax regime from 1st June 2023.
Article 70: Publication and Application of the UAE Corporate Tax law
Publication in the Official Gazette is an official declaration by the Authority to the general public.
- Publication: The publication of the UAE Corporate Tax Law will be in the Official Gazette of the UAE Federal Government.
- Application: The application of the provisions will be after fifteen (15) days from the publication of the UAE’s Corporate Tax Law.
As the law of Corporate Tax was published in the UAE Official Gazette on October 10, 2022, the law provisions came into effect on October 25, 2022.
This date helps taxpayers ascertain the date and Tax Period from when the new UAE Corporate Tax Law will be applicable to them so that they can determine their tax liability according to the date of publication and application. Additionally, this also aids the Taxable Persons to file Tax Returns within the stipulated time period in the UAE Corporate Tax Law.
