Key Changes in Tax Dispute Procedures in the UAE

The Federal Decree Law on Tax Procedures has been amended with effect from 01 November 2021 with below notable changes:

1. Time-limit for filing reconsideration applications, objections before TDRC, and appeals before Courts has been increased from 20 to 40 weekdays
2. Cases for waiver, refund including payment in installments of administrative penalties to be reviewed and approved by a Committee. The separate decision shall set out the formation of the committee, its bylaws, and manner of holding meetings for such cases.
3. Filing objection before TDRC - only tax amount, as against tax and penalties earlier, to be deposited for admissibility of the case before TDRC.
4. Objection before TDRC is not admissible if it is not filed within 40 weekdays from the date of being notified of reconsideration decision by the FTA
5. An alternate mechanism for filing objections and appeals to be prescribed for federal and local government entities in tax disputes
6. Minimum 50% penalties or as may be decided by the Courts, to be paid either by way of cash or bank guarantee as pre-condition for filing appeal before Courts

An increase in the time limit for filing tax litigation and pre-deposit of only tax amount for filing objection before TDRC and 50% penalties at the time of appeal before Courts are a big relief for UAE businesses contesting tax disputes.

Detailed alert on the amendments related to Tax Procedures Law to follow.