The latest clarifications from the Federal Tax Authority came at the right time, especially with the controversy raging over the matter raised by some chartered accountants and those who claim to be tax consultants, whose businesses flourished after the announcement of the establishment of the Authority and the adoption of the tax system in the country.
The controversy and great concern that has gripped the arena and the market in general was due to the role of some legal accounting firms and “consultants”, who portray the decisions as not differentiating between a small trader or an emerging and novice entrepreneur and large companies that are well-established in the market with revenues exceeding tens of millions of dirhams. In fact, in their analyses, they painted bleak pictures of what the situation will be like during the first quarter of next year, forgetting the fact that the UAE has become one of the best global destinations preferred by the world’s wealthy, leading companies and entrepreneurs who flock to it from all over, due to the facilities and ideal environment they have found in it for doing business, far from the bureaucracy of other regions that practice tax exaggerations that they cannot handle.
The Authority had been keen to clarify over the past two days that “the first tax period for a newly established company of a legal person subject to corporate tax depends on the first fiscal year under the Commercial Companies Law.” It pointed out that the Corporate Tax Law applies to tax periods starting on or after June 1, 2023, and the tax period for the taxable person is the fiscal year or part thereof for which a tax return must be submitted.
The awareness clarification also addressed the time period for cancelling tax registration in the event of ceasing to practice business or business activities before or during the first tax period.
The Authority issues general clarifications with the aim of raising the level of tax awareness among business sectors and achieving the best rates of tax compliance.
I have provided a link for those concerned, which includes all the details related to the matter.
The Authority’s explanatory step deserves all our appreciation and interaction by publishing it to everyone and introducing it because it ultimately serves the bright image of the business environment in our country and enhances its competitiveness.. in addition to encouraging the Authority to continue the approach of transparency and openness with the arena and those dealing with it.
This approach is also strongly required during the coming period, especially with regard to utilizing social media platforms to inform the public of all developments regarding the tax status and condition of each individual in the business community, on whose role we are counting in the process of diversifying our national economy.
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