RVG Newsletter - October 2022

Federal Tax Authority to launch new EmaraTax platform

The UAE Federal Tax Authority plans to launch a new integrated platform this year to further digitalize tax administration as part of the national digital agenda. EmaraTax, being launched after an extensive period of assessment, consultation and development, is a major milestone for the FTA, the authority said in a statement. The platform is currently mobile-ready, and the app will be launched shortly after the EmaraTax platform goes live in November 2022.

“EmaraTax represents the culmination of several months of intense effort building an enhanced tax administration platform designed to enable taxpayers to manage their taxes in a simpler, faster, more transparent manner,” the FTA said. The new platform is a modern tax administration ecosystem that integrates FTA with other government entities such as the Central Bank of the UAE and national technology-based programs, including UAE PASS, to simplify the use of common data. It also simplifies a range of user processes, from logging in to compiling tax returns.

Ministry of Finance announces amendments to Excise Tax Law

The UAE Ministry of Finance unveiled amendments to some provision of the Federal Decree-Law No 7 of 2017 on Excise Tax, effective from 14th October 2022.The amendments of some provisions of the law aim at supporting the business sector, facilitating fulfillment of obligations for taxable persons, minimizing tax avoidance, and addressing challenges related to the application of the excise tax. The Federal Decree-Law No. 19 of 2022 on the Amendment of Some Provisions of the Federal Decree-Law No. 7 of 2017 on Excise Tax includes the following new amendments:

1. Persons importing excise goods for purposes other than conducting business will be excepted from tax registration while remaining liable to pay the relevant excise tax on the import. An additional amendment to the same Article requires the application for exemption from tax registration shall be submitted prior to the import activity and not when the tax is due.

2. A new Clause has been added confirming that any person who receives an amount as tax or issues an invoice reflecting tax, must settle such amount to the Federal Tax Authority (FTA), and the amount be treated with the same treatment determined for due tax. Therefore, a person subject to tax shall pay the amounts he receives as tax to the FTA, even in cases where the tax was applied by mistake or evasion.

Provisions for the statute of limitation relating to tax audits, tax assessments, and permissible timeframes to submit a voluntary disclosure have been added. The Statute of Limitation Article sets the maximum time frame in which the FTA – which is responsible for the enforcement of Excise Tax – can act. Once this period expires, the FTA is generally precluded from taking action.

Generally, the FTA may not conduct a tax audit or issue a tax assessment to a taxable person after the expiration of 5 years from the end of the relevant tax period. In accordance with the provisions, there are exceptions to that general rule. The new Federal Decree-Law includes other amendments. In accordance with the Decree, the amendments are effective from 14th October 2022.

Zero rating of supply of medications and medical equipment under UAE VAT

The UAE VAT Law provides for zero-rating of “preventive and basic health care services and related goods and services”. Pharmaceutical products and medical equipment that are supplied in the healthcare industry are included in the term “related goods”. The zero-rating criteria for the supply of pharmaceutical products and medical equipment. The zero-rating criteria for such goods are outlined in Article 41 of the Executive Regulation to the VAT-Decree Law. Pharmaceutic products and medical equipment are eligible for a zero rating if they meet the three basic criteria.

According to first criterion, such goods must fall within the definition of medication/medical equipment set out in Cabinet Decision 56 of 2017.

Secondly, such goods must be approved by the Ministry of Health and Prevention or imported with its permission or approval.

And the third condition is that such goods are related to preventive or preventive basic health care services. A pharmaceutical product or equipment that meets the Thus, the zero-rating provisions shall be interpreted strictly and narrowly and should be applied only if all the above underlying conditions are satisfied.

Dubai Customs discusses further trade cooperation with Italy

H.E. Ahmed Mahboob Musabih, Director General of Dubai Customs, CEO of Ports, Customs and Free Zone Corporation discussed with an Italian diplomatic and economic delegation headed by H.E. Giuseppe Finocchiaro, Consul General of Italy in Dubai opportunities of further mutual economic cooperation and means to enhance trade between Dubai and Italy.?

The meeting, which was held at Dubai Customs headquarters, touched on the customs services and facilities that Dubai Customs provide to facilitate trade for companies and businesses.

Maria Lucia Martorelli, Deputy Trade Commissioner to the UAE, Thomas Paoletti, President of the Italian Business Council Dubai & Northern Emirates and Dubai, as well as Dubai Customs executive directors and heads of departments, attended this important meeting, which includes,

Musabih highlighted that mutual trade between Dubai and Italy has performed well this year, stressing on the historic and strong relations with the Italian diplomatic missions and business community within Dubai Customs vision to help boost the emirate’s trade to AED 2 trillion, and consolidate its position as a leading customs organization.?

“We are optimistic about the future of trade in Dubai and the UAE, especially since the value of trade for the first time exceeded the trillion-dirham barrier during the first half of this year. The economic partnership agreements concluded by the UAE aimed at expanding the network of global trading partners.” In the meeting, His Excellency briefed the visitors on the pillars of the Dubai Customs Strategic Plan 2021-2026, which it launched in accordance with its mission to protect society and promote sustainable economic development through commitment, facilitation and innovation.?

In the meeting, a number of Dubai Customs initiatives and products were covered including the Cross Border e-commerce Platform which aims to boost regional e-commerce activity and encourage businesses to establish their headquarters in Dubai.?

Dubai customs also presented the Authorized Economic Operator; a federal initiative that works in linking the country commercially with other countries, enabling its member companies to easily access their goods to global markets, especially the markets of countries where mutual recognition agreements were signed. He added that the investment will enable NIIF’s domestic and international investors to have a meaningful exposure in the sector through a unique and scalable platform with a significant presence across sea-based container terminals and land-based container logistics infrastructure.