The UAE's Federal Tax Authority announces new tax

The UAE's Federal Tax Authority announces new tax

The UAE Value Added Tax (VAT) was modified on October 30 by the Ministry of Finance. All of the amendments will take effect on January 1, 2023.

The modifications are as follows:

• The right to request an exemption from VAT registration is available to those who are registered and make taxable supplies. However, they must only produce zero-rated supplies going forward or cease producing any other types of supplies altogether.
• In accordance with the deadline for releasing tax invoices, a 14-day window will be set aside for issuing tax credit notes to settle output tax.
• If necessary, the Federal Tax Authority may in some circumstances forcefully deregister registered individuals.

UAE tax: Financial professionals explain the new 9% corporate fee

"The corporate tax law confirms that the tax incentives given to free zone companies will apply, provided the companies have sufficient substance in the UAE, derive Qualifying Income, have not elected to be subject to corporate tax, and comply with the requirements relating to arm's length transactions and transfer pricing.

"Any revenue that free zone companies may get that is not Qualifying Income will be taxed at a rate of 9%. It is crucial that UAE firms consult with their advisors to determine how much the new law will apply to them and what their obligations would be.