Federal Tax Authority Cautions Against Excepting Any Persons When Charging Taxes Unless Specified in Tax Laws

Press release

Published April 30th, 2018 - 05:27 GMT

Khalid Al Bustani, Director General, Federal Tax Authority

The Federal Tax Authority (FTA) has reiterated its call for all registered businesses to collect Value Added Tax (VAT) and Excise Tax on all taxable transactions and from all costumers, cautioning against excepting any individual or organisation that does not fall under one of the excepted categories specified in the UAE tax laws.

In an official statement issued today, the FTA urged taxable businesses to remain vigilant and precise in their business transactions. Businesses must avoid granting exceptions from VAT, the Authority warned, clarifying that no transaction may be considered as outside the scope of tax, exempt, or zero-rated unless it was stated in the legislation or announced by the Ministry of Finance or The Federal Tax Authority, where any such exception was made, this is considered illegal and the supplier shall be liable for any tax not collected on the supply.

The Federal Tax Authority reassured businesses that it periodically issues updated official notices that clearly specify the categories that are not subject to tax, exempt, or zero-rated, as stipulated in UAE tax laws and formal cabinet decisions.

Background Information

Federal Tax Authority

By virtue of this Federal Law by Decree a public federal authority shall be established under the name of the Federal Tax Authority. The headquarters of the authority shall be located in the city of Abu Dhabi. The authority shall be in charge of managing and collecting federal taxes and related fines, distributing tax-generated revenues and applying the tax-related procedures in force in the UAE.

The authority shall be managed by a board of directors chaired by the Minister of Finance and a sufficient number of members to be appointed and remunerated by a Cabinet resolution, based on the chairman’s nomination. The authority shall have an independent annual budget that shall be deemed as public funds and exempted from all taxes and fees.