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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (46)
Exempted Supply
The following supplies shall be exempted from the Tax:
1. The supply of financial Services as specified in the Executive Regulations of this
Decree- Law.
2. The supply of residential buildings through selling or leasing the same, except for those
zero- rated, in accordance with Clauses (9) and (11) of article (45) of this Decree -Law.
3. The supply of vacant lands.
4. The supply of local passenger transport.
The Executive Regulations of this Decree -Law shall establish the conditions and controls for
exempting the supplies mentioned in the preceding Clauses from the Tax.
Chapter Three
Single Supply and Mixed Supplies
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (47)
Supply Composed of more than one Component
The Executive Regulations of this Decree -Law shall establish the controls for determining
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 29
the tax treatment of any supply composed of more than one component for a single price, if
each component is subject to a different tax treatment.
Chapter Four
Special Obligations for Calculating the Tax
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (48)
Reverse Char ge
1. If the Taxable Person imports the relevant Goods or relevant Services for the purposes of the Business thereof, such Person shall be deemed to have made a taxable supply by
himself and shall be responsible for all the Tax obligations and calculating the Due Tax
thereon.
2. Notwithstanding the provisions of Clause (1) of this Article, in case that the final
destination of the Goods when entering the State is another Applying State, the Taxable
Person shall pay the Due Tax on Importation of relevant Goods according to the
mechanism specified in the Executive Regulations of this Decree -Law.
3. If a Registrant makes a taxable supply in the State of any crude or refined oil,
unprocessed or processed natural gas or Pure Hydrocarbons to another Registrant and
the Recipient of Goods intends to either resell the purchased Goods as crude or refined oil, unprocessed or processed natural gas or Pure Hydrocarbons, or use the same to
produce or distribute any type of energy, the following rules shall apply:
a. The Registrant making the supply shall not charge the Tax on the value of the supply
of Goods stated in this Paragraph.
b. The Recipient of Goods shall calculate the Tax on the value of Goods supplied thereto and shall be responsible for all Tax obligations and calculating the due tax
thereon.
4. The provisions of Clause (3) of this Article shall not apply to any of the following cases:
a. If the Recipient of such Goods fails, before the date of supply, to submit a written
confirmation to the supplier that his acquisition of the Goods is for the purpose of
resale or to be used for producing and distributing any type of energy.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 30
b. If the Recipient of such Goods fails, before the date of supply, to submit a written
confirmation to the supplier that he is a Registrant and the supplier fails to verify the
Tax Registration of the Recipient of such Goods by the means approved by the
Authority, in accordance with the data contained in the confirmation.
c. If the taxable supply is zero -rated, in accordance with Clause (1) of article (45) of this
Decree- Law.
d. If the taxable supply includes a supply of Goods or Services other than the Goods set
out in Clause (3) of this Article.
5. If the Recipient of any Goods of crude or refined oil, unprocessed or processed natural
gas, or Pure Hydrocarbons confirms in writing to the supplier that he is a Registrant for
the purposes of applying Clause (3) of this Article, the following shall apply:
a. The supplier shall not be responsible for calculating the tax related to the supply
unless he knows or is supposed to know that the Recipient is not a Registrant on the
date of supply.
b. The recipient shall be obligated to calculate the Due Tax for the supply.
6. If the supplier mentioned in Paragraph (a) of Clause (5) of this Article is supposed to know that the Recipient of Goods is not registered for tax purposes on the date of
supply, the supplier and Recipient of Goods shall be jointly and severely liable for the
Due Tax and relevant fines in relation to the supply.
7. The Executive Regulations of this Decree -Law shall determine the following:
a. Conditions and cases of applying the mechanism set out n Clause (1) of this Article.
b. Additional duties related to record keeping for calculation of the Tax according to the
mechanism set out in Clause (1) of this Article.
c. The Cabinet may issue a resolution identifying other Goods or Services that are subject to the reverse charge mechanism, along with identifying terms and
conditions related thereto.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 31
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (49)
Importation of Relevant Goods
The person other than the registrant shall pay the due tax on the importation of relevant
goods from outside the applying states at the date of importation according to the payment
mechanism specified by the Executive Regulations of this Decree -Law.
Chapter Five
Designated Areas
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (50)
Designated Area
The "Designated Area" that meets the conditions established in the Executive Regulations of
this Decree- Law shall be treated as being outside the State.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (51)
Transfer of Goods in Designated Areas
1. Goods may be transferred from one designated area to another designated area without any tax due thereon.
2. The Executive Regulations of this Decree -Law shall determine the procedures and
conditions for the transfer of goods from and to a designated area and the method of
maintaining, storing and processing such goods therein.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (52)
Exceptions for Designated Areas
Notwithstanding the provisions of article (50) of this Decree -Law, the Executive Regulations
of this Decree -Law shall establish the conditions under which the business practiced in the
designated areas shall be deemed to be practiced inside the State.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 32
Part Seven
Calculation of the Due Tax
Chapter One
Due Tax for a Tax Period
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (53)
Calculation of the Payable Tax
The payable tax for any tax period shall be calculated as being equal to the total output tax
payable in accordance with the provisions of this Decree -Law, made during the tax period
less the total refundable input tax by the taxable person during the same tax period.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (54)
Refundable Input Tax
1. The input tax that is refundable by the taxable person for any tax period shall be the total
sum of the input tax paid for goods and services used or intended to be used for making
any of the following:
a. Taxable Supplies;
b. Supplies to be made outside the State when being taxable supplies if they are made
in the State.
c. Supplies specified in the Executive Regulations of this Decree -Law that are made
outside the State, and would have been treated as exempted from the tax if they are
made inside the State.
2. If a taxable person imports goods through another applying state and the intended final
destination of such goods is the State at the time of importation, the taxable person shall
be entitled to treat the tax paid for importation of goods to the applying state as a
refundable input tax under the conditions specified in the Executive Regulations of this
Decree- Law.
3. If a taxable person transfers goods to the State after being imported thereto in an applying state, the taxable person shall be entitled to treat the tax paid for the goods in
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 33
the applying state as a refundable input tax subject to the conditions specified in the
Executive Regulations of this Decree -Law.
4. The taxable person shall not be entitled to recover the input tax in respect of the tax paid in accordance with Clause (2) of article (48) of this Decree -Law.
5. The Executive Regulations of this Decree -Law shall determine the cases where the input
tax is excepted from being refunded.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (55)
Refund of Refundable Input Tax in the Tax Period
1. Subject to the provisions of article (56) of this Decree -Law, the Refundable Input Tax
may be deducted under the Tax Return relating to the first Tax Period in which the
following conditions are met:
a. Where any of the following cases are fulfilled:
i. The Taxable Person receives and keeps the Tax Invoice, in accordance with the
provisions of this Decree -Law, provided that the tax invoice contains the details
of the supply related to the input tax, or keeps any other document, pursuant to Clause (3) of article (65) of this Decree -Law in respect of the supply for which the
input Tax is paid.
ii. The Taxable Person imports Goods and receives and keeps invoices and importation documents, pursuant to the provisions of this Decree -Law and the
Executive Regulations thereof, for the Importation for which the Input Tax has
been paid or stated in the Tax Return.
iii. The Taxable Person imports Ser vices and receives and keeps invoices, pursuant
to the provisions of this Decree -Law and the Executive Regulations thereof, for
the importation on which the input Tax has been stated in the Tax Return.
b. The Taxable Person pays the Consideration or any part thereof, as determined in the Executive Regulations of this Decree -Law.
2. If the Taxable Person entitled to recover the input Tax fails to do so during the Tax Period
in which the conditions stated in Clause (1) of this Article are met, he may include the
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 34
refundable input Tax in the Tax Return for the subsequent Tax Period.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (56)
Input Tax Paid before the Tax Registration
1. The registrant may recover the refundable input tax paid before the tax registration
under the tax return submitted for the first Tax Period following the tax registration, paid
for all of the following:
a. Supply of goods and services made to him prior to the date of tax registration.
b. Importation of goods by him prior to the date of tax registration. on the condition that such goods and services are used to make supplies that give the right to refund
after the tax registration.
2. Notwithstanding the provisions of Clause (1) of this Article, the input tax may not be
refunded in any of the following cases:
a. Receiving goods and services for purposes other than making taxable supplies.
b. The input tax related to the depreciated part of the Capital Assets before the date of
tax registration.
c. If the services are received more than five years prior to the date of tax registration.
d. If a person transfers the goods to an applying state prior to the tax registration in the
State.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (57)
Refund of Tax by Government Agencies and Charities
1. "Without prejudice to the general provisions o input tax r efund, a Cabinet resolution, to
be issued upon the proposal of the Minister, shall determine the Government Agencies
and Charities entitled to recover the full amount of the input Tax according to the
following:
a. The Input Tax paid by the Government Agency for the purposes of its sovereign
activities.
b. The Input Tax paid by the Charity for the purposes of its relevant Charitable Activity.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 35
2. Notwithstanding the provisions of Clause (1) above, the following shall be excluded
from the refund:
a. The Tax excluded from refund, in accordance with the provisions of the Executive Regulations of this Decree -Law.
b. The Tax paid for Goods and Services used to make exempted supplies."
Chapter Two
Apportionment and Adjustment of the Input Tax
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (58)
Calculating the Refundable Input Tax
The Executive Regulations of this Decree -Law shall specify the method in which the
refundable input tax is calculated, if the input tax is paid for goods or services during a specific tax period to make supplies that give the right to refund pursuant to the provisions of article (54) and other supplies that do not give the right to refund, or for activities
performed not in the course of practicing the business.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (59)
Conditions and Mechanism of Input Tax Adjustment
The Executive Regulations of this Decree -Law shall determine the conditions and
mechanism for adjusting the input tax in the following cases:
1. If the taxable person attributes the Input Tax, either fully or partially, to make Taxable
Supplies, but changed the use, or the intended use, of those Goods or services prior to
making the Taxable Supplies.
2. If the taxable person attributes the Input Tax, either fully or partially, to make Exempt
Supplies, or for activities that do not fall within the conduct of Business, but changed the use or the intended use of the those goods or services related to the Input Tax prior to
making Exempt Supplies.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 36
Chapter Three
Capital Assets Scheme
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (60)
Capital Assets Scheme
1. If a capital asset is supplied or imported by a taxable person, the latter shall assess the
period of use of such asset and make the necessary adjustments to the Input Tax paid
pursuant to the Capital Assets Scheme.
2. A taxable person shall keep the records related to capital assets for at least ten years.
3. The Executive Regulations of this Decree -Law shall determine the following:
a. Capital assets subject to the provisions of this Decree -Law and their estimated useful
life.
b. The method of adjusting capital assets and the periods for which adjustments should
be made.
c. The cases where the period for keeping records of capital asset records is extended.
Chapter Four
Adju stment of Tax after the Supply Date
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (61)
Cases and Conditions for Output Tax Adjustments
"The Registrant shall adjust the output Tax after the date of supply in any of the following cases:
a. If the supply is cancelled.
b. If the Tax treatment of the supply is changed due to a change in the nature of the
supply.
c. If the previously agreed Consideration for the supply is altered for any reason whatsoever.
d. If the Recipient of Goods or Recipient of Services returned them to the Registrant in
full or in part and the Consideration is returned in full or in part.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 37
e. If the tax is levied or tax transaction is applied erroneously.
2. Paragraph (e) of Clause (1) of this Article shall not apply where the place of supply was
treated by the supplier on the date of supply as being subject to Clause (1) of article (27),
but, as a result of a movement of the Goods, it turned out that it should have been treated as a supply place under paragraph (b/1) of Clause (3) hereof.
3. In order to adjust the output Tax, any of the following conditions shall be met:
a. If the output Tax amount charged on the supply stated in the Tax Invoice does not
match the Tax that shall actually be charged on the supply as a result of any of the
cases mentioned in Clause (1) of this Article.
b. If the Registrant submits a Tax Return for the tax period during which the supply
occurred and an amount was incorrectly calculated as being the amount of the
output Tax due for this supply as the result of any of the cases mentioned in Clause
(1) of this Article."
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (62)
Mechanism for Output Tax Adjustment
The output tax shall be adjusted according to the following:
1. If the output Tax due for the supply exceeds the output Tax calculated by the Registrant,
the Registrant shall issue a new Tax Invoice and shall calculate the additional amount of
the Payable Tax during the period which such an increase was identified.
2. If the output Tax calculated by the Registrant exceeds the output Tax which should have
been charged on the supply, the Registrant shall issue a Tax Credit Note according to the provisions of this Decree -Law, not later than (14) fourteen days of the date on which any
of the cases set out in Clause (1) of article (61) hereof occurs.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (63)
Adjustment due to the Issuance of Tax Credit Notes
Without prejudice to Clause (2) of article (62) of this Decree -Law, if the registrant issues a
Tax Credit Note to correct output tax charged to the recipient of goods or recipient of
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 38
services, the tax stated in the Tax Credit Note shall be considered as:
1. A reduction of the output tax for the registrant of this tax credit note.
2. A reduction of the Input Tax by the recipient of goods or recipient of services for the Tax
Period during which the tax credit note was received.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (64)
Adjustment of Bad Debts
1. The registered supplier may reduce the output tax in a current tax period to adjust the output tax paid for any previous tax period if all of the following conditions are met:
a. Goods and services are supplied and the due tax is charged and paid.
b. the consideration for the supply is written off in full or part as a bad debt in the
accounts of the supplier.
c. The lapse of more than six (6) months following the date of supply.
d. The registered supplier notifies the recipient of goods and recipient of services of the amount of consideration for the supply that has been written off.
2. The registered recipient of goods or recipient of services shall reduce the refundable
input tax for the current tax period related to a supply received during any previous tax
period where the consideration has not been paid and all of the following conditions are
met:
a. The registered supplier reduced the output tax as stated in Clause (1) of this Article
and the recipient of goods and the recipient of Services has received a notification from the supplier of the Consideration being written off.
b. The recipient of goods and recipient of services received the Goods and services and
the relevant Input Tax was deducted.
c. The Consideration was not paid in full or in part for the supply for over (6) six
months.
3. The reduction stated in Clause (1) and (2) shall be equal to the Tax related to the
consideration which has been written off according to paragraph (b) of Clause (1) of this
Article.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 39
Chapter Five
Tax Invoices
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (65)
Conditions and Requirements for Issuing Tax Invoices
1. "The Registrant shall, when making a Taxable Supply, issue an original Tax Invoice and
deliver it to the Recipient of Goods or Services.
2. The Registrant shall, when making a Deemed Supply, issue an original Tax Invoice and
deliver it to the Recipient of Goods or Services, if any, or keep it in his records if there is no Recipient of Goods or Services.
3. The Executive Regulations of this Decree -Law shall determine the following:
a. The data to be included in the Tax Invoice.
b. The conditions and procedures necessary for the issuance of an electronic Tax Invoice.
c. The cases where the Registrant is not obligated to issue and deliver a Tax Invoice to the Recipient.
d. The cases where other documents may be issued instead of the Tax Invoice, the
conditions thereof and the data to be contained therein.
e. The cases where a Person may issue a tax invoice on behalf of the registered supplier.
4. Any Person receiving any amount as Tax or for which a Tax Invoice is issued shall pay
such amount to the Authority, and shall receive the same Tax treatment of the tax due
under the provisions of this Decree -Law."
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (66)
Document of Supply to an Applying State
Subject to the provisions of article (65) of this Decree -Law, each registrant who supplies
goods or services considered to be supplied in any of the applying states, shall deliver to the
recipient of goods and services a document containing all the information to be stated in the
tax invoice and any other data as specified in the Executive Regulations of this Decree -Law,
provided that such document is not titled "Tax Invoice" and does not contain any levied tax
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 40
amount.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (67)
Date of Issuance of Tax Invoices
1. The Registrant shall issue the Tax Invoice within (14) days as of the date of the supply set
forth in article (25) and (26) of this Decree -Law.
2. The Executive Regulations of this Decree -Law shall identify the cases that are subject to
time limits other than the ones stated in Clause (1) above, or cases where the Tax Invoice shall be promptly issued, as per the controls set forth therein.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (68)
Rounding in Tax Invoices
For the purposes of determining the tax stated in the tax invoice, the Executive Regulations
of this Decree -Law shall define the method of calculation and the total value to be paid if the
tax is less than one fils of a UAE Dirham.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (69)
Currency Used in Tax Invoices
For the purposes of the tax invoice, if the supply is made in a currency other than the UAE
Dirham, the amount stated in the tax invoice shall be converted into the UAE Dirham
according to the exchange rate approved by the Central Bank in the State at the date of the
supply.
Chapter Six
Tax Credit Notes
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (70)
Conditions and Requirements for Issuing Tax Credit Notes
1. The Registrant shall issue an original tax credit note when there is a reduction of the
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 41
output tax on any supply made thereby pursuant to the provisions of Clause (2) of
article (62) of this Decree -Law and shall deliver the same to the recipient of goods or
recipient of services.
2. The registrant shall, when making a deemed supply, issue an original tax credit note if there is a reduction of the output tax on such supply pursuant to the provisions of Article
(61) of this Decree -Law and shall keep the same in his records.
3. The Executive Regu lations of this Decree -Law shall determine the following:
a. The basic data to be included in the tax credit note in cases where the taxable person
is obligated to issue such note.
b. The conditions and procedures necessary for the issuance of an electronic tax credit
note.
c. The cases where the registrant is not obligated to issue and deliver a tax credit note
to the recipient of goods or services.
d. The cases where other documents may be issued in instead of the tax credit note, the
conditions thereof and the data to be included therein.
e. The cases where a person may issue a tax credit note on behalf of the registered supplier.
Part Eight
Tax Period, Tax Returns, Tax Payment and Refund of Tax
Chapter One
Tax Period
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (71)
Duration of the Tax Period
The Executive Regulations of this Decree -Law shall determine the tax period for which the
taxable person shall calculate and pay the tax and the exceptional cases in which the
Authority may amend the tax period.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 42
Chapter Two
Tax Returns and Payment of the Tax
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (72)
Submission of Tax Returns
1. The taxable person shall submit to the Authority the tax return at the end of each tax
period, within the time limits and in accordance with the procedures determined by the
Executive Regulations of this Decree -Law to declare all the supplies made or received
during such period.
2. The government agencies that may submit simplified tax returns to the Authority shall be determined by a Cabinet resolution issued upon the recommendation of the Minister.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (73)
Payment of the Tax
The Executive Regulations of this Decree -Law shall determine the time limits and
procedures for payment of the tax shown in the tax return as payable in accordance with the provisions of this Decree -Law.
Chapter Three
Carrying forward the Excess of Refundable Tax and Tax Refund
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (74)
Excess Refundable Tax
1. Notwithstanding the provisions of the Executive Regulations of this Decree -Law, the
taxable person shall carry forward any excess of the refundable tax to the subsequent
tax periods and offset such excess against the payable tax or any administrative fines
imposed pursuant to the provisions of this Decree -Law or Federal Law No. (7) of 2017
on Tax Procedures in the subsequent tax periods until such excess is fully utilized, in the
following cases:
a. If the refundable input tax of the taxable person, pursuant to this Decree -Law,
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 43
exceeds the payable output tax for the same tax period.
b. If the tax paid by the taxable person to the Authority exceeds the payable tax in
accordance with the provisions of this Decree -Law, other than the case referred to in
paragraph (a) of Clause (1) of this Article.
2. If there is any excess for any tax period after being carried forward for a period of time,
the taxable person may submit to the Authority an application for requesting the refund
of such excess. The Executive Regulations of this Decree -Law shall determine the time
limits, procedures and mechanisms of returning any remaining excess to the taxable
person.
Chapter Fou r
Further Provisions on Tax Refund
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (75)
Tax Refund in Special Cases
The Authority may, according to the conditions, rules and procedures set forth in the
Executive Regulations of this Decree -Law, refund the tax paid for any supply or importation
made by any of the following:
1. A national of the State with regard to the goods and services related to the construction
of a new house, which is not part of the person's business.
2. A non -resident person in the State or an applying state, who practices the business and is
not a taxable person.
3. A non -resident person with regard to the goods supplied for him in the State that will be
exported.
4. Foreign governments, international organizations, diplomatic bodies and missions in
accordance with the conventions to which the State is a party.
5. Any persons or categories to be determined under a Cabinet resolution, upon the
proposal of the Minister.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 44
Part Nine
Violations and Penalties
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (76)
Administrative Fine Assessment
Without prejudice to the provisions of the Tax Procedures Law, the Authority shall issue an
Administrative Fine Assessment to the Person and notify him thereof within five (5) working
days as of the date of issuance, in any of the following cases:
1. Failure by the Taxable Person to display the tax -inclusive prices, in accordance with the
provisions of article (38) of this Decree -Law;
2. Failure by the Taxable Person to notify the Authority of applying the Tax based on the
margin, in accordance with the provisions of article (43) of this Decree -Law;
3. Failure to adhere to the conditions and procedures to be followed for keeping the Goods
in a designated area or moving them to another designated area;
4. Failure by the Taxable Person to issue the Tax Invoice or a substitute document when making any supply;
5. Failure by the Taxable Person to issue the Tax Credit Note or a substitute document; or
6. Failure by the Taxable Person to comply with the conditions and procedures related to the issuance of the Tax Invoice and the Tax Credit Note electronically.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (77)
Tax Evasion
Without prejudice to the Tax Evasion cases set forth in the Tax Procedures Law, if it is proved
that a Person who is not a Registrant acquires Goods in accordance with Clause (3) of Article
(48) of this Decree -Law, and claims that he is a Registrant, he shall be deemed to have
committed a Tax evasion and shall be punished in accordance with the provisions of the Tax
Procedures Law.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 45
Part Ten
General Provisions
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (78)
Record Keeping
Without prejudice to the provisions related to record keeping contained in any other law,
every taxable person shall keep the following documents:
a. Records of all supplies or importation of goods and services;
b. All tax invoices and substitute documentation related to the receipt of goods or services;
c. All tax credit notes and substitute documentation received;
d. All tax invoices and substitute documentation issued;
e. All tax credit notes and substitute documentation issued;
f. Records of goods and services that have been disposed of or used for matters not related
to the business, referring to the tax paid for the same;
g. Records of goods and services purchased and for which the input tax has not been deducted;
h. Records of goods and services exported;
i. Records of adjustments and corrections made to the accounts and tax invoices.
j. Records of any taxable supplies made or received in accordance with Clause (3) of
article (48) of this Decree- Law, including any declarations submitted or received with
regard to such taxable supplies;
k. A tax record containing the following data:
a. The due tax on the taxable supplies;
b. The due tax on the taxable supplies according to the mechanism set out in Clause (1) of article (48) of this Decree -Law;
c. The due tax after the correction or amendment of an error;
d. The refundable tax for the supplies or importation;
e. The refundable tax after the correction or amendment of an error. The Executive
Regulations of this Decree -Law shall determine the following:
a. Periods, rules and conditions for keeping the records set forth in Clause (1) of this
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 46
Article.
b. Rules and procedures for maintaining the confidentiality of the records to which
the Authority may have access in the case of the government agencies mentioned
in Clause (2) of article (72) of this Decree -Law.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (79)
Tax Registration Number
The taxable person or any person authorized in writing thereby shall mention the Tax Registration Number in each tax return, notice, tax invoice, tax credit note, any other
document related to the tax and any correspondences set forth in this Decree -Law or
Federal Law No. (7) of 2017 on Tax Procedures referred to above.
Article (79 -bis)
Statute of Limitations
1. Notwithstanding the cases set forth in Clauses (2), (3), (6) and (7) of this Article, the
Authority shall not carry out a Tax Audit or issue a Tax Assessment for the Taxable
Person following the lapse of (5) five years from the end of the relevant Tax Period.
2. The Authority may carry out a Tax Audit or issue a Tax Assessment for the Taxable Person following the lapse of (5) five years from the end date of the relevant Tax Period, if the same is notified that the procedures of such Tax Audit have been commenced
before the lapse of the (5) five years; provided that the Tax Audit shall be carried out or
the Tax Assessment shall be issued, as the case may be, within (4) four years from the date of notification of the Tax Audit.
3. The Authority may carry out a Tax Audit or issue a Tax Assessment following the lapse of (5) five years from the end date of the relevant Tax Period if such Tax Audit or the Tax
Assessment issuance is related to a Voluntary Disclosure had been provided in the fifth
year of the end of the Tax Period; provided that the Tax Audit or the Tax Assessment issuance, as the case may be, is carried out within one year from the date of providing
the Voluntary Disclosure.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 47
4. The Cabinet may, at the Minister's proposal, issue a resolution adjusting the time limit
specified for completing the Tax Audit or issuing the Tax Assessment, pursuant to
Clauses (2) or (3) above.
5. No Voluntary Disclosure may be provided following the lapse of (5) five years from the
end date of the relevant Tax Period.
6. In case of Tax Evasion, the Authority may carry out a Tax Audit or issue a Tax Assessment
within (15) fifteen years from the end of the Tax Period within which the Tax Evasion
occurs.
7. In case of tax registration failure, the Authority may carry out a Tax Audit or issue a Tax
Assessment within (15) fifteen years from the date on which the Taxable Person would
have been required to proceed with the Tax Registration.
8. The statute of limitations set out in this Article shall be interrupted for any of the reasons
set forth in Federal Law No. (5) of 1985, Enacting the Law of Civil Transactions, or any
other federal law superseding the same.
Part Eleven
Final Provisions
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (80)
Transitional Provisions
1. If the supplier receives the Consideration or any part thereof or issues an invoice for
Goods or Services prior to the date of entry into force of this Decree -Law, the date of
supply shall be the same as the date of entry into force of the provisions of this
Decree- Law in the following cases if the same is made following the date of entry into
force of this Decree -Law:
a. Transferring Goods under the supervision of the supplier.
b. Placing Goods at the disposal of the Recipient.
c. Completing the assembly or installation of the Goods.
d. Issuing the customs declaration.
e. Accepting the supply by the Recipient.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 48
2. In case of entering into an agreement prior to the date of ent ry into force of this
Decree- Law, which is related to a complete or partial supply made following the date of
entry into force of this Decree -Law and does not contain provisions on the tax
chargeable on such supply, it shall be treated as follows:
a. The Consideration shall be considered inclusive of the tax if levied under this
Decree- Law.
b. The Tax shall be calculated on the supply regardless of whether or not it has been
taken into account when determining the Consideration for the supply.
3. The Executive Regulations of this Decree -Law shall provide for the provisions on the
application of this Decree -Law to the case where the agreement is made prior to the date
of entry into force of this Decree -Law, but the supply is made wholly or partly after the
date of entry into force of this Decree -Law.
3.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (81)
Revenue Sharing
The tax revenues and administrative fines to be collecte d in accordance with the provisions
of this Decree- Law shall be subject to sharing between the Federal Government and the
Emirates Governments, pursuant to the provisions of Federal Decree- Law No. (13) of 2016
on the Establishment of the Federal Tax Authority.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (82)
The Executive Regulations
The Cabinet shall, upon the proposal of the Minister, issue the Executive Regulations of this
Decree- Law.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (83)
Matters not stipulated herein shall be subject to the provisions of the Tax Procedures Law.
Federal Decree- Law No. (8) of 2017 on Value -Added Tax (VAT) 49
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (84)
Repeal of Conflicting Provisions
Any text or provision inconsistent or discrepant with the provisions of this Decree -Law is
hereby repealed.
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tax | Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT) | Article (85)
Publishing and Entry into Force
This Decree -Law shall be published in the Official Gazette and shall enter into force as of 1st
January 2018.
Khalifa bin Zayed Al Nahyan
President of the United Arab Emirates
Issued by us in the Presidential Palace, Abu Dhabi
On: 01 Dhul Hijjah 1438 AH.
Corresponding to 23 August 2017 AD.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (1)
Definitions
In the application of the provisions of this Decree -Law, the following words and expressions
shall have meanings assigned against each, unless the context otherwise requires:
State : United Arab Emirates.
Federal
Government : The government of the United Ar ab Emirates.
Local
Government : Any of the governments of the Member Emirates of the
Federation.
Ministry : Ministry of Finance.
Federal Law No. (47) of 2022 on Corporate and Business Tax 3
Minister : Minister of Finance.
Authority : Federal Tax Authority.
Corporate Tax : The tax imposed by this Decre e-Law on juridical persons and
Business income.
Business : Any activity conducted regularly, on an ongoing and
independent basis by any Person and in any location, such as
industrial, commercial, agricultural, vocational, professional,
service or excava tion activities or any other activity related to the
use of tangible or intangible properties.
Qualifying
Income : Any income derived by a Qualifying Free Zone Person that is
subject to Corporate Tax at the rate specified in paragraph (a) of
Clause 2 of Article 3 of this Decree- Law.
Government
Entity : The Federal Government, Local Governments, ministries,
government departments, government agencies, authorities and
public institutions of the Federal Government or Local
Governments.
Government
Contr olled
Entity : Any juridical person, directly or indirectly wholly owned and
controlled by a Government Entity, as specified in a resolution
issued by the Cabinet at the suggestion of the Minister.
Person : Any natural person or juridical person.
Bus iness
Activity : Any transaction or activity, or series of transactions or series of
activities conducted by a Person in the course of its Business.
Mandated
Activity : Any activity conducted by a Government Controlled Entity in
accordance with the leg al instrument establishing or regulating
the entity, that is specified in a resolution issued by the Cabinet
at the suggestion of the Minister.
State's
Territory : The State's lands, territorial sea and airspace above it.
Natural
Resources : Water, o il, gas, coal, naturally formed minerals, and other
non -renewable, non- living natural resources that may be
Federal Law No. (47) of 2022 on Corporate and Business Tax 4
extracted from the State's Territory.
Extractive
Business : The Business or Business Activity of exploring, extracting,
removing, or otherwise pr oducing and exploiting the Natural
Resources of the State or any interest therein as determined by
the Minister.
Non -Extractiv
e Natural
Resource
Business : The Business or Business Activity of separating, treating, refining,
processing, storing, transpo rting, marketing or distributing the
Natural Resources of the State.
Qualifying
Public Benefit
Entity : Any entity that meets the conditions set out in Article 9 of this
Decree -Law and that is listed in a resolution issued by the
Cabinet at the suggesti on of the Minister.
Qualifying
Mutual Fund : Any entity whose principal activity is the issuing of investment
interests to raise funds or pool investor funds or establish a joint
mutual fund with the aim of enabling the holder of such an
investment inte rest to benefit from the profits or gains from the
entity's acquisition, holding, management or disposal of
investments, in accordance with the applicable legislation and
when it meets the conditions set out in Article 10 of this
Decree -Law.
Exempt
Perso n : A Person exempt from Corporate Tax under Article 4 of this
Decree -Law.
Taxable
Person : A Person subject to Corporate Tax in the State under this
Decree -Law.
Licensing
Authority : The competent authority concerned with licensing or authorizing
a Business or Business Activity in the State.
License : A document issued by a Licensing Authority under which a
Business or Business Activity is conducted in the State.
Taxable
Income : The income that is subject to Corporate Tax under this
Decree -Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 5
Fiscal Year : The period specified in Article 57 of this Decree -Law.
Tax Return : Information filed with the Authority for Corporate Tax purposes
in the form and manner as prescribed by the Authority, including
any schedule or attachment thereto, and any amendment
thereof.
Tax Period : The period for which a Tax Return is required to be filed.
Related Party : Any Person associated with a Taxable Person as determined in
Clause 1 of Article 35 of this Decree -Law.
Revenue : The gross amount o f income derived during a Tax Period.
Recognized
Stock
Exchange : Any stock exchange established in the State that is licensed and
regulated by the relevant competent authority, or any stock
exchange established outside the State of equal standing.
Resident
Person : The Taxable Person specified in Clause 3 of Article 11 of this
Decree -Law.
Non -Resident
Person : The Taxable Person specified in Clause 4 of Article 11 of this
Decree -Law.
Free Zone : A designated and defined geographic area within t he State that is
specified in a decision issued by the Cabinet at the suggestion of
the Minister.
Free Zone
Person : A juridical person incorporated, established or otherwise
registered in a Free Zone, including a branch of a Non -Resident
Person registe red in a Free Zone.
Unincorporate
d Association : A relationship established under a contract between two or more
Persons, such as a partnership or trust or any other similar
association of Persons, in accordance with the applicable
legislation of the St ate.
Permanent
Establishment : A place of Business or other form of presence in the State of a
Non -Resident Person in accordance with Article 14 of this
Decree -Law.
State Sourced : Income accruing in, or derived from, the State as specified in
Federal Law No. (47) of 2022 on Corporate and Business Tax 6
Income Article 13 of this Decree -Law.
Qualifying
Free Zone
Person : A Free Zone Person that meets the conditions of Article 18 of this
Decree -Law and is subject to Corporate Tax under Clause 2 of
Article 3 of this Decree -Law.
Investment
Manager : A Person who provides brokerage or investment management
services that is subject to the regulatory oversight of the
competent authority in the State.
Corporate Tax
Payable : Corporate Tax that has or will become due for payment to the
Authority in respect of on e or more Tax Periods.
Foreign
Partnership : A relationship established by contract between two or more
Persons, such as a partnership or trust or any other similar
association of Persons, in accordance with laws of a foreign
jurisdiction.
Foreign Tax
Credit : Tax paid under the laws of a foreign jurisdiction on income or
profits that may be deducted from the Corporate Tax due, in
accordance with the conditions of Clause 2 of Article 47 of this
Decree -Law.
Family
Foundation : Any foundation, trust or similar entity that meets the conditions
of Article 17 of this Decree -Law.
Interest : Any amount accrued or paid for the use of money or credit,
including discounts, premiums and profit paid in respect of an
Islamic financial instrument and other pay ments economically
equivalent to interest, and any other amounts incurred in
connection with the raising of finance, excluding payments of
the principal amount.
Accounting
Income : The accounting net profit or loss for the relevant Tax Period as
per the financial statements prepared in accordance with the
provisions of Article 20 of this Decree -Law.
Exempt
Income : Any income exempt from Corporate Tax under this Decree -Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 7
Connected
Person : Any Person affiliated with a Taxable Person as determine d in
Clause 2 of Article 36 of this Decree -Law.
Tax Loss : Any negative Taxable Income as calculated under this
Decree -Law for a given Tax Period.
Qualified
Business
Activity : Any activity that is specified in a decision issued by the Cabinet at
the suggestion of the Minister .
Foreign
Permanent
Establishment : A place of Business or other form of presence outside the State of
a Resident Person that is determined in accordance with the
criteria prescribed in Article 14 of this Decree -Law.
Market V alue : The price which could be agreed in an arm's -length free market
transaction between Persons who are not Related Parties or
Connected Persons in similar circumstances.
Qualifying
Group : Two or more Taxable Persons that meet the conditions of Claus e
2 of Article 26 of this Decree -Law.
Net Interest
Expense : Interest expense minus interest income as determined in
accordance with the provisions of this Decree -Law.
Bank : A Person licensed in the State as a bank or finance institution or
an equiv alent licensed activity that allows the taking of deposits
and the granting of credits as defined in the applicable legislation
of the State.
Insurer : A Person licensed in the State as an Insurer that accepts risks by
entering into or carrying out cont racts of insurance, in both the
life and non -life sectors, including contracts of reinsurance and
captive insurance, as defined in the applicable legislation of the
State.
Control : The direction and influence over one Person by another Person
in accord ance with the conditions of Clause 2 of Article 35 of this
Decree -Law.
Tax Group : Two or more Taxable Persons treated as a single Taxable Person
Federal Law No. (47) of 2022 on Corporate and Business Tax 8
according to the conditions of Article 40 of this Decree -Law.
Withholding
Tax Credit : The Corporate Tax amount that can be deducted from the
Corporate Tax due in accordance with the conditions of Clause 2
of Article 46 of this Decree -Law.
Withholding
Tax : Corporate Tax to be withheld from State Sourced Income in
accordance with Article 45 of this Decree -Law.
Tax
Registration : A procedure under which a Person registers for Corporate Tax
purposes with the Authority.
Tax
Registration
Number : A unique number issued by the Authority to each Person who is
registered for Corporate Tax purposes in the State .
Tax
Deregistration : A procedure under which a Person is deregistered for Corporate
Tax purposes with the Authority.
Tax
Procedures
Law : The federal law that governs tax procedures in the State.
Administrativ
e Fines : Amounts imposed and collec ted under this Decree -Law or the
Tax Procedures Law.
Chapter Two
Imposition of Corporate Tax and Applicable Rates
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (2)
Imposition of Corporate Tax
Corporate Tax shall be imposed on Taxable Income, at the rates determined under this
Decree- Law, and is payable to the Authority under this Decree -Law and the Tax Procedures
Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 9
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (3)
Corporate Tax Rate
1. Corporate Tax shall be imposed on the Taxable Income at the following rates:
a. 0% (zero percent) on the portion of the Taxable Income not exceeding the amount
specified by virtue of a resolution to be issued by the Cabinet at the suggestion of the
Minister.
b. 9% (nine percent) on Taxable Income that exceeds the amount specified by virtue of
a resolution to be resolution issued by the Cabinet at the suggest ion of the Minister.
2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:
a. 0% (zero percent) on Qualifying Income.
b. 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18
of this Decree -Law and any resolution issued by the Cabinet at the suggestion of the
Minister in respect thereof.
Chapter Three
Exempt Person
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (4)
Exempt Person
1. The following Persons shall be exempt from Corporate Tax:
a. A Government Entity.
b. A Government Controlled Entity.
c. A Per son engaged in an Extractive Business, that meets the conditions of Article 7 of
this Decree- Law.
d. A Person engaged in a Non- Extractive Natural Resource Business, that meets the
conditions of Article 8 of this Decree -Law.
e. A Qualifying Public Benefit Entity under Article 9 of this Decree -Law.
f. A Qualifying Mutual Fund under Article 10 of this Decree -Law.
g. A public pension or social security fund, or a private pension or social security fund
that is regulated by the competent authority in the State and that meet s any other
Federal Law No. (47) of 2022 on Corporate and Business Tax 10
conditions that may be prescribed by the Minister.
h. A juridical person incorporated in the State that is wholly owned and controlled by
an Exempt Person specified in paragraphs (a), (b), (f) and (g) of Clause 1 of this
Article and that:
i. Undertak es part or all of the activity of the Exempt Person.
ii. Is engaged exclusively in holding assets or investing funds for the benefit of the
Exempt Person.
iii. Only carries out activities that support those carried out by the Exempt Person.
i. Any other Person as may be determined in a resolution issued by the Cabinet at the
suggestion of the Minister.
2. A Person under paragraphs (a), (b), (c) and (d) of Clause 1 of this Article that is a Taxable Person insofar as it relates to any Business or Business Activity under Art icles 5, 6, 7 or 8
of this Decree- Law, respectively, shall be treated as an Exempt Person for the purposes of
Articles 26, 27, 38 and 40 of this Decree -Law.
3. Persons specified in paragraphs (f), (g), (h) and (i) of Clause 1 of this Article, as
applicable, are required to apply to the Authority to be exempt from Corporate Tax in the
form and manner and within the timeline prescribed by the Authority in this regard.
4. The exemption from Corporate Tax under paragraphs (f), (g), (h) and (i) of Clause 1 of this Art icle, as applicable, shall be effective from the beginning of the Tax Period
specified in the application, or any other date determined by the Authority.
5. In the event that the Exempt Person fails to meet any of the conditions under the relevant provisions of this Decree -Law at any particular time during a Tax Period, such
Person shall cease to be an Exempt Person for the purposes of this Decree -Law from the
beginning of that Tax Period.
6. For the purposes of Clause 5 of this Article, the Minister may prescrib e the conditions
under which a Person may continue to be an Exempt Person, or cease to be an Exempt Person from a different date, in any of the following cases:
a. Failure to meet the conditions is the result of the liquidation or termination of the Person.
b. Failure to meet the conditions is of a temporary nature and will be promptly rectified,
Federal Law No. (47) of 2022 on Corporate and Business Tax 11
and appropriate procedures are in place to monitor the compliance with the relevant
conditions of this Decree -Law.
c. Any other cases as may be prescribed by the Minister.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (5)
Government Entity
1. A Government Entity shall be exempt from Corporate Tax and the provisions of this
Decree- Law shall not apply thereto.
2. Notwithstanding Clause 1 of this Article, a Government Entity shall be subject to the
provisions of this Dec ree-Law if it conducts a Business or Business Activity under a
License issued by a Licensing Authority.
3. Any Business or Business Activity conducted by a Government Entity under a License
issued by a Licensing Authority shall be treated as an independent Business, and the
Government Entity shall keep financial statements for this Business separately from the
Government Entity's other activities.
4. The Government Entity shall calculate the Taxable Income for its Business or Business Activity specified in Clause 2 of this Article independently for each Tax Period, in
accordance with the provisions of this Decree -Law.
5. Transactions between the Business or Business Activity specified under Clause 2 of this Article and the other activities of the Government Entity sh all be considered Related
Party transactions subject to the provisions of Article 34 of this Decree -Law.
6. A Government Entity may apply to the Authority for all its Businesses and Business Activities to be treated as a single Taxable Person for the purposes of this Decree- Law
subject to meeting the conditions to be prescribed by the Minister.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (6)
Government Controlled Entity
1. A Government Controlled Entity shall be exempt from Corporate Tax and the provisions
of this Decree -Law shall not apply thereto .
2. Notwithstanding Clause 1 of this Article, a Government Controlled Entity shall be subject
Federal Law No. (47) of 2022 on Corporate and Business Tax 12
to the provisions of this Decree -Law if it conducts a Business or Business Activity that is
not its Mandated Activities.
3. Any Business or Business Activity conducted by a Government Controlled Entity that is
not its Mandated Activity shall be treated as an independent Business and the
Government Controlled Entity shall keep financial statements for this Business
separately from its Mandated Activity.
4. The Government Co ntrolled Entity shall calculate the Taxable Income for its Business or
Business Activity that is not its Mandated Activity independently for each Tax Period, in
accordance with the provisions of this Decree -Law.
5. Transactions between the Business or Busines s Activity specified in Clause 2 of this
Article and the Mandated Activity of the Government Controlled Entity shall be
considered Related Party transactions subject to the provisions of Article 34 of this
Decree- Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (7)
Extractive Business
1. A Pers on shall be exempt from the Corporate tax and the provisions of this Decree -Law
shall not apply to its Extractive Business if it meets all of the following conditions :
a. The Person directly or indirectly holds or has an interest in a right, concession or
License issued by the Local Government to undertake its Extractive Business.
b. The Person is actually subject to tax under the applicable legislation of an Emirate in
accordance with the provisions of Clause 6 of this Article.
c. The Person has submitted a notification to the Ministry in the form and manner
agreed with the Local Government.
2. If a Person that meets the conditions of Clause 1 of this Article derives income from both
an Extractive Business and any other Business that is within the scope of this
Decree- Law, the following shall apply:
b. The income derived from the Extractive Business shall be calculated and taxed
according to the applicable legislation of the Emirate.
b. The income derived from the other Business shall be subject to the provisions of this
Federal Law No. (47) of 2022 on Corporate and Business Tax 13
Decree -Law, unless that other Business meets the conditions of being exempted
from Corporate Tax under Article 8 of this Decree -Law.
3. For the purposes of Clause 2 of this Article, a Person shall not be considered to derive
income from any other Business if suc h other Business is supporting or incidental to that
Person's Extractive Business and the Revenue of such other Business in a Tax Period
does not exceed 5% (five percent) of the total Revenue of that Person in the same Tax
Period.
4. For the purposes of calcu lating the Taxable Income of the Person's other Business, the
following shall apply:
a. The other Business shall be treated as an independent Business, and financial
statements shall be kept for this Business separately from the Extractive Business.
b. Any commo n expenses shared between the Extractive Business and the other
Businesses of the Person shall be divided pro rata their respective Revenues in the
Tax Period, unless such expenses were taken into account at different percentages for the purposes of calculating the tax payable by the Person under the applicable
legislation of the relevant Emirate in respect of its Extractive Business, in which case
the expenses shall be divided in accordance with the latter percentage.
c. The Person shall calculate the Taxable Income for its other Business independently
for each Tax Period in accordance with the provisions of this Decree -Law.
5. Transactions between the Extractive Business and the other Business of the same Person
shall be considered Related Party transactions sub ject to the provisions of Article 34 of
this Decree -Law, unless such other Business is exempt from Corporate Tax under Article
8 of this Decree -Law.
f. A Person shall be considered actually subject to tax under the applicable legislation of
the Emirate for th e purposes of this Article if the Local Government imposes a tax on
income or profits, or a tax on royalty or revenue, or any other form of taxes, duties or
levy in respect of such Person's Extractive Business.
7. The exemption under this Article shall not ap ply to contractors, subcontractors, suppliers
or any other Person used or contemplated to be used in any part of the performance of the Extractive Business that does not in its own right meet the conditions to be exempt
Federal Law No. (47) of 2022 on Corporate and Business Tax 14
from Corporate Tax under this Article or Article 8 of this Decree -Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (8)
Non -Extractive Natural Resource Business
1. A Person shall be exempt from Corporate tax and the provisions of this Decree -Law shall
not apply to its Non -Extractive Natural Resource Business where all of the follo wing
conditions are met:
a. The Person directly or indirectly holds or has an interest in a right, concession or
License issued by a Local Government to undertake its Non -Extractive Natural
Resource Business in the State.
b. The Person's income from its Non- Extr active Natural Resource Business is derived
solely from Persons that undertake a Business or Business Activity.
c. The Person is actually subject to tax under the applicable legislation of an Emirate in accordance with the provisions of Clause 6 of this Artic le.
d. The Person has made a notification to the Ministry in the form and manner agreed with the Local Government.
2. If a Person that meets the conditions of Clause 1 of this Article derives income from both a Non -Extractive Natural Resource Business and any ot her Business that is within the
scope of this Decree- Law, the following shall apply:
a. The income derived from the Non -Extractive Natural Resource Business shall be
calculated and taxed according to the applicable legislation of the Emirate.
b. The income deriv ed from the other Business shall be subject to this Decree -Law,
unless that other Business meets the conditions to be exempt from Corporate Tax
under Article 7 of this Decree -Law.
3. For the purposes of Clause 2 of this Article, a Person shall not be consider ed to derive
income from any other Business where such other Business is ancillary or incidental to
that Person's Non -Extractive Natural Resource Business and the Revenue of such other
Business in a Tax Period does not exceed 5% (five percent) of the total Revenue of that
Person in the same Tax Period.
4. For the purposes of calculating the Taxable Income of the Person's other Business, the
Federal Law No. (47) of 2022 on Corporate and Business Tax 15
following shall apply:
a. The other Business shall be treated as an independent Business, and financial
statements shall be kept for this Business separately from the Non- Extractive Natural
Resource Business.
b. Any common expenses shared between the Non -Extractive Natural Resource
Business and the other Businesses of the Person shall be divided pro rata their respective Revenues in the Tax Period, unless such expenses were taken into account
at a different percentages for the purposes of calculating the tax payable by the Person under the applicable legislation of the relevant Emirate in respect of its
Non -Extractive Natural Resou rce Business, in which case the expenses shall be
divided in accordance with the latter percentage.
c. The Person shall calculate the Taxable Income for the other Business independently
for each Tax Period in accordance with the provisions of this Decree -Law.
5. Transactions between the Non- Extractive Natural Resource Business and any other
Business of the same Person shall be considered Related Party transactions subject to the
provisions of Article 34 of this Decree -Law, unless such other Business is exempt fro m
Corporate Tax under Article 7 of this Decree -Law.
6. A Person shall be considered actually subject to tax under the applicable legislation of
the Emirate, for the purposes of this Article if the Local Government imposes a tax on income or profits, a royalty or revenue tax, or any other form of tax, charge or levy in
respect of such Person's Non -Extractive Natural Resource Business.
7. The exemption under this Article shall not apply to contractors, subcontractors, suppliers
or any other Person used or contemplated to be used in any part of the performance of
the Non -Extractive Natural Resource Business that does not in its own right meets the
conditions of being exempt from Corporate Tax under this Article or Article 7 of this
Decree- Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (9)
Qualifying Public Benefit Entity
1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax if all of the
Federal Law No. (47) of 2022 on Corporate and Business Tax 16
following conditions are met:
a. It is established and operated for any of the following:
i. Exclusively for religious, charitable, scientific, artistic, cu ltural, athletic,
educational, healthcare, environmental, humanitarian, animal protection or
other similar purposes. As a professional entity, chamber of commerce, or a
similar entity operated exclusively for the promotion of social welfare or public
benef it.
b. It does not conduct a Business or Business Activity, except for such activities that directly relate to or are aimed at fulfilling the purpose for which the entity was
established.
c. Its income or assets are used exclusively in the furtherance of the pur pose for which
it was established, or for the payment of any associated necessary and reasonable
expenses incurred.
d. No part of its income or assets is payable to, or otherwise available, for the personal
benefit of any shareholder, member, trustee, founder or settlor that is not itself a
Qualifying Public Benefit Entity, Government Entity or Government Controlled Entity.
e. Any other conditions as may be prescribed in a resolution issued by the Cabinet at the suggestion of the Minister.
2. The exemption under Clause 1 of this Article shall be effective from the beginning of the
Tax Period in which the Qualifying Public Benefit Entity is listed in the Cabinet decision
issued at the suggestion of the Minister or any other date determined by the Minister.
3. For the pur poses of monitoring the continued compliance by a Qualifying Public Benefit
Entity with the conditions of Clause 1 of this Article, the Authority may request any
relevant information or records from the Qualifying Public Benefit Entity within the
timeline specified by the Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (10)
Qualifying Mutual Fund
1. A mutual fund may apply to the Authority to be exempt from Corporate Tax as a
Federal Law No. (47) of 2022 on Corporate and Business Tax 17
Qualifying Mutual fund where all of the following conditions are met:
a. The mutual fund or the mutual fund's manager is subject to the regulatory oversight
of a competent authority in the State, or a foreign competent authority recognized
for the purposes of this Article.
b. Shares in the mutual fund are traded on the Recognized Stock Exchange, or are
marketed and made available sufficiently and widely to investors.
c. The main or principal purpose of the mutual fund is not to avoid corporate tax.
d. Any other conditions as may be prescribed in a decision issued by Cabinet at the
suggestion of the Minister.
2. For the purposes of mo nitoring the continued compliance by a Qualifying Mutual Fund
with the conditions of Clause 1 of this Article, the Authority may request any relevant
information or records within the timeline prescribed by the Authority.
Chapter Four
Taxable Person and Corporate Tax Base
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (11)
Taxable Person
1. Corporate Tax shall be imposed on a Taxable Person at the rates determined under this Decree- Law.
2. For the purposes of this Decree -Law, a Taxable Person shall be either a Resident Person
or a Non -Resident Person.
3. A Resident Person is any of the following Persons:
a. A juridical person that is incorporated, established or otherwise recognized under the applicable legislation of the State, including a Free Zone Person.
b. A juridical person that is incorporated, established or otherwise recognized under the
applicable legislation of a foreign jurisdiction and is effectively managed and
controlled in the State.
c. A natural person who conducts a Business or Business Activity in the State.
d. Any other Person as may be determined in a resolution issued by the Cabinet at the suggestion of the Minister.
Federal Law No. (47) of 2022 on Corporate and Business Tax 18
4. A Non -Resident Person is a Person who is not considered a Resident Person under
Clause 3 of this Article and that:
a. Has a Permanent Establishment in the State as under Article 14 of th is Decree- Law;
b. Derives State Sourced Income as under Article 13 of this Decree -Law; or
c. Has a nexus in the State as specified in a resolution issued by the Cabinet at the
suggestion of the Minister.
5. A branch in the State of a Person referred to in Clause 3 of this Article, shall be treated as
one and the same Taxable Person. The Cabinet shall, upon a suggestion of the Minister
and in coordination with the relevant competent authorities, issue a decision specifying
the categories of Business or Business Activ ity conducted by a resident or non -resident
natural person that are subject to Corporate Tax under this Decree -Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (12)
Corporate Tax Base
1. A Resident Person, which is a juridical person, is subject to Corporate Tax on its Taxable
Income derived fr om the State or from outside the State, in accordance with the
provisions of this Decree -Law.
2. The Taxable Income of a Resident Person, who is a natural person, is the income derived
from the State or from outside the State insofar as it relates to the Business or Business
Activity conducted by the natural person in the State as set out in Clause 6 of Article 11 of this Decree -Law.
3. A Non -Resident Person is subject to Corporate Tax on the following:
a. The Taxable Income that is attributable to the Permanent Est ablishment of the
Non -Resident Person in the State.
b. State Sourced Income that is not attributable to a Permanent Establishment of the
Non -Resident Person in the State.
c. The Taxable Income that is attributable to the nexus of the Non -Resident Person in
the S tate as determined in a resolution issued by the Cabinet pursuant to paragraph
(c) of Clause 4 of Article 11 of this Decree -Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 19
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (13)
State Sourced Income
1. Income shall be considered a State Sourced Income in any of the following cases:
a. Where it is derived by a Resident Person.
b. Where it is derived by a Non -Resident Person and the income received has been paid
or accrued in connection with, and attributable to, a Permanent Establishment of that
Non -Resident Person in the State.
c. Where it is otherwise accrued in or derived from activities performed, assets located, capital invested, rights used, or services performed or benefitted from in the State.
2. Subject to any conditions and limitations that the Minister may determine, State Sourced
Income shall include, without limitation:
a. Income from the sale of goods in the State.
b. Income from the provision of services that are rendered or used or benefitted from in
the State.
c. Income from a contract insofar as it has been wholly or partly performed or
benefitted from in the State.
d. Income from movable or immovable property in the State.
e. Income from the disposal of shares or capital of a Resident Person.
f. Income from the use or the right to use any intellectual or intangible property in the
State, or from granting a per mission to use them in the State.
3. Interest that meets any of the following conditions:
i. The loan is secured by movable or immovable property located in the State.
ii. The borrower is a Resident Person.
iii. The borrower is a Government Entity.
h. Insurance or reinsuran ce premiums in any of the following cases:
i. The insured asset is located in the State.
ii. The insured Person is a Resident Person.
iii. The insured activity is conducted in the State.
Federal Law No. (47) of 2022 on Corporate and Business Tax 20
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (14)
Permanent Establishment
1. A Non -Resident Person shall be deemed to hav e a Permanent Establishment in the State
in any of the following cases:
c. If it has a fixed or permanent place in the State through which the Business of the
Non -Resident Person, or any part thereof, is conducted.
b. If a Person has and habitually exercises an authority to conduct a Business or
Business Activity in the State on behalf of the Non -Resident Person.
c. If it has any other form of nexus in the State as specified in a resolution issued by the
Cabinet at the suggestion of the Minister.
2. For the purposes of paragraph (a) of Clause 1 of this Article, a fixed or permanent place
in the State includes:
a. A place of management where management and commercial decisions that are
necessary for conducting the Business are, in substance, made.
b. A branch.
c. An office.
d. A fac tory.
e. A workshop.
f. Land, buildings and other real property.
g. Installations or platforms for the exploration of renewable or non -renewable natural
resources.
h. A mine, an oil or gas well, a quarry or any other place of extraction of natural resources, including vessels and platforms used for the extraction of such resources.
i. A building site, a construction project, or place of assembly or installation, or
supervisory activities in connection therewith, but only if such site, project or activities, whether separately or together with other sites, projects or activities, last
more than (6) six months, including connected activities that are conducted at the site or project by one or more Related Parties of the Non -Resident Person.
3. Notwithstanding Clauses 1 and 2 of this Article, a fixed or permanent place in the State
shall not be considered a Permanent Establishment of a Non -Resident Person if it is used
Federal Law No. (47) of 2022 on Corporate and Business Tax 21
solely for any of the following purposes:
a. Storing, displaying or delivering goods or merchandise belonging to th at Person.
b. Keeping a stock of goods or merchandise belonging to that Person for the sole
purpose of processing by another Person.
c. Purchasing goods or merchandise or collecting information for the Non -Resident
Person.
d. Conducting any other activity of a prep aratory or supporting nature for the Non -
Resident Person.
e. Conducting any combination of activities mentioned in paragraphs (a), (b), (c)and (d) of Clause 3 of this Article, provided that the overall activity is of a preparatory or
supporting nature.
4. Claus e 3 of this Article shall not apply to a fixed or permanent place in the State that is
used or maintained by a Non- Resident Person if the same Non -Resident Person or its
Related Party carries on a Business or Business Activity at the same place or at anoth er
place in the State where all of the following conditions are met:
a. Where the same place or the other place constitutes a Permanent Establishment of
the Non -Resident Person or its Related Party.
b. The overall activity resulting from the combination of the activities carried out by the Non -Resident Person and its Related Party at the same place or at the two places is
not of a preparatory or supporting nature and together would form a cohesive
Business operation, had the activities not been fragmented.
5. For th e purposes of paragraph (b) of Clause 1 of this Article, a Person shall be considered
as having and habitually exercising an authority to conduct a Business or Business
Activity in the State on behalf of a Non- Resident Person if any of the following
conditions are met:
a. The Person habitually concludes contracts on behalf of the Non -Resident Person.
b. The Person habitually negotiates contracts that are concluded by the Non- Resident
Person without the need for material modification by the Non -Resident Person.
c. The provisions of Paragraph (b) of Clause 1 of this Article shall not apply if the person
conducts a Business or Business Activity in the State as an independent agent and acts
Federal Law No. (47) of 2022 on Corporate and Business Tax 22
for the Non -Resident Person in the ordinary course of that Business or Business A ctivity,
unless the Person acts exclusively or almost exclusively on behalf of the Non -Resident
Person, or if that Person cannot be considered legally or economically independent from
the Non -Resident Person.
7. For the purposes of Clause 3 of this Article, t he Minister may prescribe the conditions
under which the mere presence of a natural person in the State does not create a Permanent Establishment for a Non -Resident Person in any of the following cases:
a. If such presence is a consequence of a temporary and exceptional situation.
b. Where the natural person is employed by the Non- Resident Person, and all of the
following conditions are met:
i. The activities being conducted in the State by the natural person are not part of the core income -generating activities of the Non -Resident Person or its Related
Parties.
ii. The Non -Resident Person does not derive State Sourced Income.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (15)
Investment Manager Exemption
1. For the purposes of Clause 6 of Article 14 of this Decree -Law, an Investment Manager
shall be considered an independent agent when acting on behalf of a Non -Resident
Person, if all of the following conditions are met:
a. The Investment Manager is engaged in the business of providing investment management or brokerage services.
b. The Investment Manager is subject to the regulatory oversight of the competent
authority in the State.
c. The transactions are carried out in the ordinary course of the Investment Manager's Business.
d. The Investment Manager acts in relation to the transactions in an independent capacity.
e. The Investment Manager transacts on an arm's length basis with the Non -Resident
Person and receives due compensation for the provision of services.
Federal Law No. (47) of 2022 on Corporate and Business Tax 23
f. The Investment Manager is not the Non -Resident Person's representative in the State
in relation to any other inco me or transaction that is subject to Corporate Tax for the
same Tax Period.
g. Any such other conditions as may be prescribed in a resolution issued by the Cabinet
at the suggestion of the Minister.
2. For the purposes of Clause 1 of this Article, "transactions" means any of the following:
a. Transactions in commodities, real property, bonds, shares, derivatives or securities of
all kinds.
2. Transactions of buying or selling any foreign currency or placement of funds against
interest.
c. Such other transactions permissib le to be carried out by the Investment Manager on
behalf of a Non -Resident Person under the applicable legislation of the State.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (16)
Partners in an Unincorporated Association
1. For the purposes of this Decree -Law, unless an application is made under Clause 8 of
this Article, and subject to any conditions the Minister may prescribe, the
Unincorporated Association itself shall not be considered a Taxable Person, and Persons
conducting a Business as an Unincorporated Association shall be treated as individual
Taxable Persons.
2. Where Clause 1 of this Article applies, a Person who is a partner in an Unincorporated Association shall be treated as:
a. Conducting the Business of the Unincorporated Association.
b. Having a status, intention, and purpose of the Uninco rporated Association.
c. Holding assets that the Unincorporated Association holds.
d. Being party to any arrangement to which the Unincorporated Association is a party.
3. For the purposes of Clause 1 of this Article, the assets, liabilities, income and expenses of
the Unincorporated Association shall be allocated to each partner pro rata their
distributive shares in that Unincorporated Association, or in the manner prescribed by
the Authority where the distributive share of a partner cannot be identified.
Federal Law No. (47) of 2022 on Corporate and Business Tax 24
4. The Taxab le Income of a partner in an Unincorporated Association shall take into
account the following:
a. Expenses incurred directly by the partner in conducting the Business of the
Unincorporated Association.
b. Interest Expense incurred by the partner in relation to c ontributions made to the
capital account of the Unincorporated Association.
5. Interest paid by an Unincorporated Association to a partner on their capital account shall
be treated as an allocation of income to the partner and is therefore not a deductible
expenses for the purpose of calculating the Taxable Income of that partners
incorporated Association.
6. For the purposes of calculating and settling the Corporate Tax Payable of a partner in an
Unincorporated Association under Chapter Thirteen of this Decree -Law, any foreign tax
incurred by the Unincorporated Association shall be allocated as a Foreign Tax Credit to each partner pro rata their distributive share in the Unincorporated Association.
7. A Foreign Partnership shall be treated as an Unincorporated Assoc iation for the purposes
of this Decree -Law if all of the following conditions are met:
a. The Foreign Partnership is not subject to tax under the laws of the foreign
jurisdiction.
b. Each partner in the Foreign Partnership is individually subject to tax with reg ards to
their distributive share of any income of the Foreign Partnership as and when the
income is received by or accrued to the Foreign Partnership.
c. Any other conditions as may be prescribed by the Minister.
8. The partners in an Unincorporated Association can make an application to the Authority
for the Unincorporated Association to be treated as a Taxable Person.
9. Where an application under Clause 8 of this Article is approved:
a. The provisions of Clauses 1 to 6 of this Article shall no longer apply to the partners in
the Unincorporated Association in respect of the Business conducted by the
Unincorporated Association.
b. Each partner in the Unincorporated Association shall remain jointly and severally
liable for the Corporate Tax Payable by the Unincorporated As sociation for those Tax
Federal Law No. (47) of 2022 on Corporate and Business Tax 25
Periods when they are partners in the Unincorporated Association.
c. One partner in the Unincorporated Association shall be appointed as the partner
responsible for any obligations and proceedings in relation to this Decree -Law on
beha lf of the Unincorporated Association.
10. Where the application under Clause 8 of this Article is approved, the Unincorporated
Association shall be treated as a Taxable Person effective from the commencement of
the Tax Period during which the application is made, or from the commencement of a future Tax Period, or any other date determined by the Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (17)
Family Foundation
1. A Family Foundation may submit an application to the Authority to be treated as an
Unincorporated Association for the purpose s of this Decree -Law if all of the following
conditions are met:
a. The Family Foundation was established for the benefit of identified or identifiable
natural persons and/or for the benefit of a public benefit entity.
b. The principal activity of the Family Foundation is to receive, hold, invest, spend
funds, or dispose of the assets associated with savings or investment, or otherwise
manage them.
c. The Family Foundation does not conduct any activity that would have constituted a
Business or Business Activity unde r Clause 6 of Article 11 of this Decree -Law had the
activity been carried out or its assets been held directly by its founder, settlor, or any
of its beneficiaries.
d. The main or principal purpose of the Family Foundation is not the avoidance of
Corporate Tax.
e. Any other conditions as may be prescribed by the Minister.
2. Where the application under Clause 1 of this Article is approved, the Family Foundation shall be treated as an Unincorporated Association effective from the commencement of
the Tax Period during which the application is made, or from the commencement of a
future Tax Period, or any other date determined by the Authority.
Federal Law No. (47) of 2022 on Corporate and Business Tax 26
3. For the purposes of monitoring the continued compliance by a Family Foundation with
the conditions of Clause 1 of this Article, the Authority may request any relevant
information or records from the Family Foundation within the timeline specified by the Authority.
Chapter Five
Free Zone Person
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (18)
Qualifying Free Zone Person
1. A Qualifying Free Zone Person is a Free Zone Person that meets all of the following
conditions:
a. Maintains actual and sufficient existence in the State.
b. Derives Qualifying Income as specified in a resolution issued by the Cabinet at the suggestion of the Minister.
c. Has not elected to be subject to Corporate Tax under Article 19 of this Decree -Law.
d. Complies with Articles 34 and 55 of this Decree -Law.
e. Meets any other conditions as may be prescribed by the Minister.
2. A Qualifying Free Zone Person that fails to meet any of the conditions under Clause 1 of this Art icle at any particular time during a Tax Period shall cease to be a Qualifying Free
Zone Person from the beginning of that Tax Period.
3. Notwithstanding Clause 2 of this Article, the Minister may prescribe the conditions or
circumstances under which a Person may continue to be a Qualifying Free Zone Person,
or cease to be a Qualifying Free Zone Person from a different date.
4. The application of paragraph (a) of Clause 2 of Article 3 of this Decree -Law to a
Qualifying Free Zone Person shall apply for the remaind er of the tax incentive period
stipulated in the applicable legislation of the Free Zone in which the Qualifying Free Zone Person is registered, such period may be extended in accordance with any
conditions as may be determined in a resolution issued by th e Cabinet at the suggestion
of the Minister, but any one period shall not exceed (50) fifty years.
Federal Law No. (47) of 2022 on Corporate and Business Tax 27
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (19)
Election to be Subject to Corporate Tax
1. A Qualifying Free Zone Person may elect to be subject to Corporate Tax at the rates
specified under Clause 1 of Article 3 of this Decree -Law.
2. The election under Clause 1 of this Article shall be effective from either of:
a. The commencement of the Tax Period during which the election is made.
b. The commencement of the Tax Period following the Tax Period during wh ich the
election was made.
Chapter Six
Calculating Taxable Income
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (20)
General Rules for Determining Taxable Income
1. The Taxable Income of each Taxable Person shall be determined separately, on the basis of adequate, standalone financial statements pr epared for financial reporting purposes
in accordance with the accounting standards accepted in the State.
2. The Taxable Income for a Tax Period shall be the Accounting Income for that period,
which was adjusted, as may be required, according to the followin g:
a. Any unrealized gain or loss under Clause 3 of this Article.
b. Exempt Income as specified in Chapter Seven of this Decree -Law.
c. Reliefs as specified in Chapter Eight of this Decree -Law.
d. Deductions as specified in Chapter Nine of this Decree -Law.
e. Transaction s with Related Parties and Connected Persons as specified in Chapter Ten
of this Decree -Law.
f. Tax Loss relief as specified in Chapter Eleven of this Decree -Law.
g. Any incentives or special reliefs for a Qualifying Business Activity as specified in a
resolutio n issued by the Cabinet at the suggestion of the Minister.
h. Any income or expenses that has not otherwise been taken into account in determining the Taxable Income under the provisions of this Decree -Law as may be
Federal Law No. (47) of 2022 on Corporate and Business Tax 28
specified in a resolution issued by the Cab inet at the suggestion of the Minister.
i. Any other adjustments as may be specified by the Minister.
3. For the purposes of calculating the Taxable Income for the relevant Tax Period, and
subject to any conditions that the Minister may prescribe, a Taxable Pers on that prepares
financial statements on an accrual basis may elect to take into account gains and losses
on a realization basis in relation to:
a. all assets and liabilities that are subject to accounting for fair value or impairment
under the applicable acc ounting standards; or
b. all assets and liabilities held on capital account at the end of a Tax Period, whilst taking into account any unrealized gain or loss that arises in connection with the
assets and liabilities held on revenue account at the end of that period.
4. For the purposes of paragraph (b) of Clause 3 of this Article:
a. "Assets held on capital account" refers to assets that the Person does not trade, assets
that are eligible for depreciation, or assets treated under applicable accounting standards as property, plant and equipment, investment property, intangible assets,
or other non -current assets.
b. "Liabilities held on capital account" refers to liabilities, the incurring of which does
not give rise to deductible expenses under Chapter Nine of this Dec ree- Law, or
liabilities treated under applicable accounting standards as non - current liabilities.
c. "Assets and liabilities held on revenue account" refers to assets and liabilities other
than those held on a capital account.
d. An "unrealized gain or loss" in cludes an unrealized foreign exchange gain or loss.
5. Notwithstanding Clauses 1 and 3 of this Article, the Minister may prescribe any of the
following for the purposes of this Decree -Law:
a. The circumstances and conditions under which a Person may prepare financial
statements using the cash basis accounting.
b. Any adjustments to the accounting standards to be applied for the purposes of
determining the Taxable Income for a Tax Period.
c. A different basis for determining the Taxable Income of a Qualifying Business
Activity.
Federal Law No. (47) of 2022 on Corporate and Business Tax 29
6. Subject to any conditions prescribed under Clause 5 of this Article, a Taxable Person may
submit an application to the Authority to change its method of accounting from cash
basis to accrual basis from the commencement of the Tax Period in which t he
application is made or from the commencement of a future Tax Period.
7. In the case of any conflict between the provisions of this Decree -Law and the applicable
accounting standards, the provisions of this Decree -Law shall prevail to that extent.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (21)
Small Business Relief
1. A Taxable Person that is a Resident Person may elect to be treated as not having derived
any Taxable Income for a Tax Period where:
a. the Revenue of the Taxable Person for the relevant Tax Period and previous Tax
Periods does not ex ceed a threshold to be set by the Minister; and
b. the Taxable Person meets all other conditions prescribed by the Minister.
2. Where Clause 1 of this Article applies to a Taxable Person, the following provisions of
this Decree- Law shall not apply:
a. Exempt Income as specified in Chapter Seven of this Decree -Law.
b. Reliefs as specified in Chapter Eight of this Decree -Law.
c. Deductions as specified in Chapter Nine of this Decree -Law.
d. Tax Loss relief as specified in Chapter Eleven of this Decree -Law.
e. Article 55 of this Decree -Law.
3. The Authority may take the necessary measures to verify the compliance with the
conditions of Clause 1 of this Article, and may request any relevant information or
records from the Taxable Person within the timeline prescribed by the Authority.
Chapter Seven
Exempt Income
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (22)
Exempt Income
Federal Law No. (47) of 2022 on Corporate and Business Tax 30
The following income and related expenses shall not be taken into account in determining
the Taxable Income:
1. Dividends and other profit distributions received from a juridical person that is a Residen t Person.
2. Dividends and other profit distributions received from an Equity participation in a
foreign juridical person as specified in Article 23 of this Decree -Law.
3. Any other income from an Equity participation as specified in Article 23 of this
Decree- Law.
4. Income of a Foreign Permanent Establishment that meets the condition of Article 24 of
this Decree- Law.
5. Income derived by a Non -Resident Person from operating aircraft or ships in
international transportation that meets the conditions of Article 25 of th is Decree- Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (23)
Participation Exemption
1. Income from an equity participation shall be exempt from Corporate Tax, subject to the conditions of this Article.
2. A Equity participation means, owning equity at 5% (five percent) or more of the shares
or capital of a juridical person, referred to as a "Participation" for the purposes of this
Chapter if all of the following conditions are met:
a. The Taxable Person has held, or has the intention to hold, the Equity participation for
an uninterrupted period of at least (12) twelve months.
b. The Participation is subject to Corporate Tax or any other tax imposed under the
applicable legislation of the country or territory in which the juridical person is a
resident, which is of a similar character to Corporate Tax at a rate not less than the
rate specified in paragraph (b) of Clause 1 of Article 3 of this Decree -Law.
c. The ownership interest in the Participation entitles the Taxable Person to receive not
less than 5% (five percent) of the profits available for distrib ution by the
Participation, and not less than 5% (five percent) of the liquidation proceeds on
cessation of the Participation.
Federal Law No. (47) of 2022 on Corporate and Business Tax 31
d. Not more than 50% (fifty percent) of the direct and indirect assets of the
Participation consist of ownership interests or entitlements that would not have
qualified for an exemption from Corporate Tax under this Article if held directly by
the Taxable Person, subject to any conditions that may be prescribed under paragraph (e) of this Clause.
e. Any other conditions as may be prescrib ed by the Minister.
3. A Participation shall be treated as having met the condition under paragraph (b) of Clause 2 of this Article where all of the following conditions are met:
a. The principal objective and activity of the Participation is the acquisition and holding
of shares or equitable interests that meet the conditions of Clause 2 of this Article.
b. The income of the Participation derived during the relevant Tax Period or Tax Periods substantially consists of income from an equity participation.
4. A Participation in a Qualifying Free Zone Person or an Exempt Person shall be treated as having met the condition under paragraph (b) of Clause 2 of this Article, subject to any conditions that may be prescribed by the Minister.
5. Where the conditions of Clause 2 of this Article continue to be met, the following income shall not be taken into account in determining Taxable Income:
a. Dividends and other profit distributions received from a foreign Participation that is not a Resident Person under paragraph (b) of Clause 3 of Article 11 of this
Decree- Law.
b. Gains or losses on the transfer, sale, or other disposition of Equity participation (or part thereof) derived after the expiry of the time period specified in paragraph (a) of
Clause 2 or Clause 9 of this Article.
c. Foreign exchange gains or losses in relation to Equity participation.
5. Impairment gains or losses in relation to Equity participation.
6. The exemption under this Article shall not apply to income derived by the Taxable
Person from an Equity participation insofar as:
a. the Participation may claim a deduction for the dividend or other distributions made to the Taxable Person under the applicable tax legislation;
b. the Taxable Person has recognized a deductible impairment loss in respect of the
Federal Law No. (47) of 2022 on Corporate and Business Tax 32
Equity participation prior to the Equity participation meeting the conditions of Clause
2 of this Article;
c. the Taxable Person or its Related Party who is subject to Corporate Tax under this Decree- Law has recognized a deductible impairment loss in respect of a loan
receivable from the Participation.
7. Where the impairment loss referred to in paragraph (c) of Clause 6 of this Article is reflected in a subsequent Tax Period, the associated income of the Taxable Person shall be exempt from Corporate Tax in that Tax Period up to the amount of income from the
Equity participation that was not exempted under paragraph (C) of Clause 6 of this Article.
8. The exemption under this Article does not apply to a loss realized on the liquidation of a Participation.
9. The exemption under this Article shall no t apply for a period of (2) two years where a
Participation was acquired in exchange for the transfer of an ownership interest that did not meet the conditions of Clause 2 of this Article or a transfer that was exempted under
Article 26 or 27 of this Decre e-Law.
10. Where a Taxable Person fails to hold a 5% (five percent) or greater ownership interest in
the Participation for an uninterrupted period of at least (12) twelve months, any income
previously not taken into account under this Article shall be included in the calculation
of the Taxable Income in the Tax Period in which the ownership interest in the
Participation falls below 5% (five percent).
11. The Minister may prescribe that an ownership interest in the shares or capital of a
juridical person meets the m inimum ownership requirement under Clause 2 of this
Article where the acquisition cost of that ownership interest exceeds a threshold specified by the Minister.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (24)
Foreign Permanent Establishment Exemption
1. A Resident Person may elect to not take into account the income, and associated
expenses, of its Foreign Permanent Establishments in determining its Taxable Income.
Federal Law No. (47) of 2022 on Corporate and Business Tax 33
a. Where Clause 1 of this Article applies, a Resident Person shall not take into account the
following in determining its Taxable Inco me or Corporate Tax Payable for a Tax Period:
a. losses in any of its Foreign Permanent Establishments, calculated as if the relevant Foreign Permanent Establishments were a Resident Person under this Decree -Law;
b. positive income and associated expenses in any of its Foreign Permanent
Establishments, calculated as if the relevant Foreign Permanent Establishment were a
Resident Person under this Decree -Law; and
c. any Foreign Tax Credit that would have been available under Article 47 of this Decree- Law had the elec tion under Clause 1 of this Article not been made.
3. For the purposes of this Article, "income and associated expenses" of a Taxable Person's
Foreign Permanent Establishments for a Tax Period is the aggregate of the income and
associated expenses in each of the relevant foreign jurisdictions.
4. In determining the income and associated expenses of a Foreign Permanent Establishment, a Resident Person and each of its Foreign Permanent Establishments shall be treated as separate and independent Persons.
5. For the pur poses of Clause 4 of this Article, a transfer of assets or liabilities between a
Resident Person and its Foreign Permanent Establishment shall be treated as having
taken place at Market Value at the date of the transfer for the purposes of determining
the Taxable Income of that Resident Person.
6. The exemption under Clause 1 of this Article shall apply to all Foreign Permanent
Establishments of the Resident Person that meet the condition specified in Clause 7 of
this Article.
6. The exemption under Clause 1 of t his Article shall only apply to a Foreign Permanent
Establishment that is subject to Corporate Tax or a tax of a similar character under the
applicable legislation of the relevant foreign jurisdiction at a rate not less than the rate
specified in paragraph (b) of Clause 1 of Article 3 of this Decree -Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 34
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (25)
Non -Resident Person Operating Aircraft or Ships in International
Transportation
Income derived by a Non -Resident Person from the operation of aircraft or ships in
international transportatio n shall not be subject to Corporate Tax where all of the following
conditions are met:
1. The Non -Resident Person is in the Business of any of the following:
a. International transport of passengers, livestock, mail, packages, merchandise or
goods by air or by sea.
b. Leasing or chartering aircraft or ships used in international transportation.
c. Leasing of equipment which are integral to the seaworthiness of ships or the
airworthiness of aircraft used in international transportation.
2. The Resident Person that performs any of the activities under Clause 1 of this Article is
exempt, or is not subject to a tax that is of a similar character to Corporate Tax, under the
applicable legislation of the country or territory in which the Non -Resident Person is
resident.
Chapte r Eight
Reliefs
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (26)
Transfers Within a Qualifying Group
1. No gain or loss needs to be taken into account in determining the Taxable Income in
relation to the transfer of one or more assets or liabilities between two Taxable Persons
that are members of the same Qualifying Group.
2. Two Taxable Persons shall be treated as members of the same Qualifying Group where all of the following conditions are met:
a. The Taxable Persons are juridical persons that are Resident Persons, or Non -Resident
Persons that have a Per manent Establishment in the State.
b. Either of the Taxable Persons owns, directly or indirectly, ownership interest of at
Federal Law No. (47) of 2022 on Corporate and Business Tax 35
least 75% (seventy -five percent) in the other Taxable Person, or a third Person owns,
directly or indirectly, ownership interest of at least 75% (seventy -five percent) in
each of the Taxable Persons.
c. None of the Persons are an Exempt Person.
d. None of the Persons are a Qualifying Free Zone Person.
e. The Fiscal Year of each of the Taxable Persons ends on the same date.
f. Both Taxable Persons prep are their financial statements using the same accounting
standards.
3. For the purposes of this Decree -Law, where a Taxable Person applies Clause 1 of this
Article:
a. the asset or liability shall be treated as being transferred at its net book value at the
time of transfer so that neither a gain nor a loss arises; and
b. the value of any consideration paid or received against the transfer of the asset or liability shall equal the net book value of the transferred asset or liability.
4. The provision of Clause 1 of this Article shall not apply where, within (2) two years from
the date of the transfer, any of the following occurs:
a. There is a subsequent transfer of the asset or liability outside of the Qualifying
Group.
b. The Taxable Persons cease to be members of the same Qualifying Group.
5. Where Clause 4 of this Article applies, the transfer of the asset or liability shall be treated
as having taken place at Market Value on the date of the transfer for the purposes of
determining the Taxable Income of both Taxable Persons f or the relevant Tax Period.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (27)
Business Restructuring Relief
1. No gain or loss needs to be taken into account in determining Taxable Income in any of the following circumstances:
a. A Taxable Person transfers its entire Business or an independent part of its Business
to another Person who is a Taxable Person or will become a Taxable Person as a result of the transfer in exchange for shares or other ownership interests of the
Federal Law No. (47) of 2022 on Corporate and Business Tax 36
Taxable Person that is the transferee.
b. One or more Taxable Persons transfer th eir entire Business to another Person who is
a Taxable Person or will become a Taxable Person as a result of the transfer in
exchange for shares or other ownership interests of the Taxable Person that is the transferee, and the Taxable Person or Taxable Pe rsons that are the transferor cease to
exist as a result of the transfer.
2. Clause 1 of this Article applies where all of the following conditions are met:
a. The transfer is undertaken in accordance with, and meets all the conditions imposed
by, the applicable legislation of the State.
b. The Taxable Persons are Resident Persons, or Non -Resident Persons that have a
Permanent Establishment in the State.
c. None of the Persons are an Exempt Person.
d. None of the Persons are a Qualifying Free Zone Person.
e. The Fiscal Year of each of the Taxable Persons ends on the same date.
f. The Taxable Persons prepare their financial statements using the same accounting
standards.
g. The transfer under Clause 1 of this Article is undertaken for valid commercial or
other non -fiscal reasons which reflect economic reality.
3. For the purposes of this Decree -Law, where a Taxable Person applies Clause 1 of this
Article, all of the following shall be observed:
a. The assets and liabilities transferred shall be treated as being transferred at their net
boo k value at the time of transfer so that neither a gain nor a loss arises.
b. The value of the shares or ownership interests received under paragraph (a) of
Clause 1 of this Article shall not exceed the net book value of the assets transferred
and liabilities assumed, less the value of any other form of consideration received.
c. The value of the shares or ownership interests received under paragraph (b) of
Clause 1 of this Article shall not exceed the book value of the shares or ownership
interests surrendered, less the value of any other form of consideration received.
d. Any Unutilized Tax Losses incurred by the Taxable Person that is the transferor prior
to the Tax Period in which the transfer under Clause 1 of this Article was performed
Federal Law No. (47) of 2022 on Corporate and Business Tax 37
may be deemed carried forw ard Tax Losses of the Taxable Person that is the
transferee, subject to the conditions to be prescribed by the Minister.
4. The provisions of this Article shall apply, as the context requires, where, in the case of a
transfer under Clause 1 of this Article:
a. shares or ownership interests are received by a Person other than the Taxable Person
that is the transferor;
b. shares or ownership interests are issued or granted by a Person other than the Taxable Person that is the transferee; or
c. no shares or ownership inte rests are received by the Taxable Person who is a partner
in an Unincorporated Association that is treated as a Taxable Person under Clause 9
of Article 16 of this Decree -Law.
5. Where a Taxable Person transfers an independent part of its Business, paragraph (c) of
Clause 3 of this Article shall apply only to those Unutilized Tax Losses that can be
reasonably attributed to the independent part of the Business being transferred.
6. The provision of Clause 1 of this Article shall not apply where, within (2) two years from
the date of the transfer, any of the following occurs:
a. The shares or other ownership interests in the Taxable Person that is the transferor
or the transferee are sold, transferred or otherwise disposed of, in whole or part, to a
Person that is not a member of the Qualifying Group to which the relevant Taxable Persons belong.
b. There is a subsequent transfer or disposal of the Business or the independent part of
the Business transferred under Clause 1 of this Article.
7. Where Clause 6 of this Article app lies, the transfer of the Business or any independent
part of the Business shall be treated as having taken place at Market Value at the date of
the transfer.
Chapter Nine
Deductions
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (28)
Deductible Expenses
Federal Law No. (47) of 2022 on Corporate and Business Tax 38
1. Expenses incurred wholly and exclusively fo r the purposes of the Taxable Person's
Business that are not capital in nature shall be deductible in the Tax Period in which they
were incurred, subject to the provisions of this Decree -Law.
2. For the purposes of calculating the Taxable Income for a Tax Per iod, no deduction is
allowed for the following:
a. Expenses not incurred for the purposes of the Taxable Person's Business.
b. Expenses incurred in deriving Exempt Income.
c. Losses not connected with or arising out of the Taxable Person's Business.
d. Such other expenses as may be specified in a resolution issued by the Cabinet at the suggestion of the Minister.
a. If expenses are incurred for more than one purpose, a deduction shall be allowed for:
a. Any identifiable part or proportion of the expenditure incurred wholly and exclusively for the purposes of deriving Taxable Income.
b. An appropriate percentage of any unidentifiable part or percentage of the expenses
incurred for the purposes of deriving Taxable Income that are determined on a fair
and reasonable basis, having r egard to the relevant facts and circumstances of the
Taxable Person's Business.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (29)
Interest Expense
Notwithstanding paragraph (b) of Clause 2 of Article 28 of this Decree -Law, Interest Expense
shall be deductible for the Tax Period in which it is incurred, subject to the other provisions
of Article 28 and Articles 30 and 31 of this Decree -Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (30)
General Interest Deduction Limitation Rule
1. A Taxable Person's Net Interest Expense shall be deductible up to 30% (thirty percent) of
the Taxable Person's accounting earnings before interest, taxes, depreciation and
amortization (EBITDA) for the relevant Tax Period, excluding any Exempt Income under
Article 22 of this Decree -Law.
Federal Law No. (47) of 2022 on Corporate and Business Tax 39
2. A Taxable Person's Net Interest Expense for a Tax Period is the amou nt of the Interest
Expense incurred during the Tax Period in addition to the amount of any Net Interest
Expense carried forward under Clause 4 of this Article, which exceeds the taxable
Interest income derived during that same period.
3. The limitation under Clause 1 of this Article shall not apply where the Net Interest
Expense of the Taxable Person for the relevant Tax Period does not exceed an amount
specified by the Minister.
4. The amount of Net Interest Expense that is not deductible under Clause 1 of this Article
may be carried forward and deducted in the subsequent (10) ten Tax Periods in the
order in which the amount was incurred, subject to Clauses 1 and 2 of this Article.
c. Interest Expense that is not deductible under any other provision of this Decree -Law
shall be excluded from the calculation of Net Interest Expense under Clause 2 of this
Article.
6. Clauses 1 to 5 of this Article shall not apply to the following Persons:
a. A Bank.
b. An Insurer.
c. A natural person undertaking a Business or Business Activity in t he State.
d. Any other Person as may be determined by the Minister.
7. The Minister may issue a decision to specify the application of Clauses 1 and 2 of this
Article to a Taxable Person that is related to one or more Persons through ownership or
control and the y are obligated under applicable accounting standards to have
consolidated financial statements.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (31)
Special Interest Deduction Limitation Rule
1. No deduction shall be allowed for Interest Expense incurred on a loan obtained, directly
or indirectly, from a Related Party in respect of any of the following transactions:
a. A dividend or profit distribution to the Related Party.
b. A redemption, repurchase, reduction or return of capital to the Related Party.
c. A contribution in the capital of the Related Party .
Federal Law No. (47) of 2022 on Corporate and Business Tax 40
d. The acquisition of an ownership interest in a Person who is a Related Party or
becomes a Related Party following the acquisition.
2. Clause 1 of this Article shall not apply where the Taxable Person can demonstrate that the main purpose of obtaining the loan and carrying out the transaction referred to under Clause 1 of this Article is not to gain a Corporate Tax advantage.
3. For the purposes of Clause 2 of this Article, no Corporate Tax advantage shall be deemed to arise where the Related Party is subject to Corporate Tax or a tax of a similar character under the applicable legislation of a foreign jurisdiction on the Interest at a rate not less
than the rate specified in paragraph (b) of Clause 1 of Article 3 of this Decree -Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (32)
Entertainment Exp enses
1. Subject to Article 28 of this Decree -Law, a Taxable Person shall be allowed to deduct
50% (fifty percent) of any entertainment, amusement, or recreation expenses incurred during a Tax Period.
2. Clause 1 of this Article applies to any expenses incurred for the purposes of receiving
and entertaining the Taxable Person's customers, shareholders, suppliers or other
business partners, including, but not limited to, expenses in connection with any of the
following:
a. Meals.
b. Accommodation.
c. Transportation.
d. Admission fees.
e. Facilities and equipment used in connection with such entertainment, amusement or
recreation.
2. Such other expenses as specified by the Minister.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (33)
Non -deductible Expenses
No deduction is allowed for:
Federal Law No. (47) of 2022 on Corporate and Business Tax 41
b. Donations, grants or gifts made to an entity that is not a Qualifying Public Benefit Entity.
2. Fines and penalties, other than the amounts awarded as compensation for damages or
breach of contract.
3. Bribes or other illicit payments.
4. Dividends, profit distributions or benefits of a similar natur e paid to an owner of the
Taxable Person.
5. Amounts withdrawn from the Business by a natural person who is a Taxable Person
under paragraph (c) of Clause 3 of Article 11 of this Decree -Law or a partner in an
Unincorporated Association.
6. Corporate Tax imposed on a Taxable Person under this Decree -Law.
7. Inputs' Value Added Tax incurred by a Taxable Person that is recoverable under Federal
Decree- Law No. (8) of 2017 referred to and what replaces it.
8. Tax on income imposed on the Taxable Person outside the State.
9. Such other expenses as specified in a resolution issued by the Cabinet at the suggestion
of the Minister.
Chapter Ten
Transactions with Related Parties and Connected Persons
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (34)
Arm's Length Principle
1. In determining the Taxable Income, transactions and arrangements between Related Parties shall meet the arm's length standard as specified in Clauses 2, 3, 4 and 5 of this
Article and any conditions that may be prescribed in a decision issued by the Authority.
2. A transaction or arrangement between Related Parties shall be deemed to have met the
arm's length standard if the results of the transaction or arrangement are consistent with
the results that would have been realized if the Persons who were not Related Parties
had engaged in a similar transaction o r arrangement under similar circumstances.
3. The arm's length result of a transaction or arrangement between Related Parties shall be
determined by applying one or a combination of the following transfer pricing methods:
a. The comparable uncontrolled price met hod.
Federal Law No. (47) of 2022 on Corporate and Business Tax 42
b. The resale price method.
c. The cost -plus method.
d. The transactional net margin method.
e. The transactional profit split method.
4. The Taxable Person may apply any transfer pricing method other than the methods
listed in Clause 3 of this Article where the Tax able Person can demonstrate that none of
the above methods can be reasonably applied to determine an arm's length result and
that any such other transfer pricing method used satisfies the condition of Clause 2 of
this Article.
5. The choice and application of a transfer pricing method or a combination of transfer
pricing methods under Clause 3 or 4 of this Article shall be made having regard to the
most reliable transfer pricing method and taking into account the following factors:
a. The contractual terms of the transaction or arrangement.
b. The characteristics of the transaction or arrangement.
c. The economic circumstances in which the transaction or arrangement is conducted.
d. The functions performed, assets employed, and risks assumed by the Related Parties entering into the transaction or arrangement.
e. The business strategies employed by the Related Parties entering into the transaction or arrangement.
7. The Authority's examination as to whether income and expenses resulting from the
Taxable Person's relevant transactions or arrangements meet the arm's length standard
shall be based on the transfer pricing method used by the Taxable Person in accordance
with Clause 3 or 4 of this Article, provided such transfer pricing method is appropriate
having regard to the factors mentioned in Clause 5 of this Article.
7. The application of the selected transfer pricing method or a combination of transfer
pricing methods in accordance with Clause 3 or 4 of this Article may result in an arm's
length range of financial results or indicat ors acceptable for establishing the arm's length
result of a transaction or arrangement between Related Parties, subject to any conditions specified in a decision issued by the Authority.
8. Where the result of the transaction or arrangement between Related P arties does not fall
Federal Law No. (47) of 2022 on Corporate and Business Tax 43
within the arm's length range, the Authority shall adjust the Taxable Income to achieve
the arm's length result that best reflects the facts and circumstances of the transaction or
arrangement.
9. Where the Authority makes an adjustment t o the Taxable Income pursuant to Clause 8
of this Article, the Authority shall rely on information that can or will be made available
to the Taxable Person.
10. Where the Authority or a Taxable Person adjusts the Taxable Income for a transaction or
arrangement to meet the arm's length standard, the Authority shall make a
corresponding adjustment to the Taxable Income of the Related Party that is party to the relevant transaction or arrangement.
11. Where a foreign competent authority makes an adjustment to a transaction or arrangement involving a Taxable Person to meet the arm's length standard, such Taxable
Person may submit an application to the Authority to make a corresponding adjustment
to its Taxable Income.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (35)
Related Parties and Controls
1. For the pu rposes of this Decree -Law, "Related Parties" means any of the following:
a. Two or more natural persons who are related up to the fourth degree of kinship or affiliation, including by way of adoption or guardianship.
b. A natural person and a juridical person wh ere:
2. the natural person or one or more Related Parties of the natural person are shareholders
in the juridical person, and the natural person, alone or together with its Related Parties,
directly or indirectly owns a 50% (fifty percent) or a greater owners hip interest in the
juridical person; or
3. the natural person, alone or together with its Related Parties, directly or indirectly
Controls the juridical person.
a. Two or more juridical persons where:
4. one juridical person, alone or together with its Related Par ties, directly or indirectly owns
a 50% (fifty percent) or a greater ownership interest in the other juridical person;
Federal Law No. (47) of 2022 on Corporate and Business Tax 44
5. one juridical person, alone or together with its Related Parties, directly or indirectly
Controls the other juridical person; or
6. any Pers on, alone or together with its Related Parties, directly or indirectly owns a 50%
(fifty percent) or a greater ownership interest in or controls such two or more juridical persons.
a. A Person and its Permanent Establishment or Foreign Permanent Establishment .
b. Two or more Persons that are partners in the same Unincorporated Association.
c. A Person who is the trustee, founder, settlor or beneficiary of a trust or foundation,
and its Related Parties.
7. For the purposes of this Decree -Law, "Control" means the ability of a Person, whether in
their own right or by agreement or otherwise to influence another Person, including:
a. The ability to exercise 50% (fifty percent) or more of the voting rights of the other Person.
b. The ability to determine the composition of 50% (fif ty percent) or more of the Board
of directors of the other Person.
c. The ability to receive 50% (fifty percent) or more of the profits of the other Person.
d. The ability to determine, or exercise significant influence over, the conduct of the Business and affairs of the other Person.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (36)
Payments to Connected Persons
1. Without prejudice to the provisions of Article 28 of this Decree -Law, a payment or
benefit provided by a Taxable Person to its Connected Person shall be deductible only if
and to the exten t that the payment or benefit corresponds with the Market Value of the
service, benefit or otherwise provided by the Connected Person and is incurred wholly
and exclusively by the Taxable Person for the purposes of the Taxable Person's Business.
2. For the pu rposes of this Decree -Law, a Person shall be deemed to be a Connected Person
of a Taxable Person if that Person is:
a. An owner of the Taxable Person.
b. A director or officer at the Taxable Person.
Federal Law No. (47) of 2022 on Corporate and Business Tax 45
c. A Related Party of any of the Persons referred to in paragraphs (a) and (b) of Clause 2
of this Article.
3. For the purposes of paragraph (a) of Clause 2 of this Article, an owner of the Taxable
Person is any natural person who directly or indirectly owns an ownership interest in the Taxable Person or Controls such Taxab le Person.
4. Where the Taxable Person is a partner in an Unincorporated Association, a Connected Person is any other partner in that same Unincorporated Association, and any Person that is a Related Party of that partner.
5. To determine that a payment or benef it provided by the Taxable Person corresponds
with the Market Value of the service or otherwise provided by the Connected Person in
exchange therefor, the relevant provisions of Article 34 of this Decree -Law shall apply as
the context requires.
6. Clause 1 of this Article shall not apply to any of the following:
a. A Taxable Person whose shares are traded on a Recognized Stock Exchange.
b. A Taxable Person that is subject to the regulatory oversight of a competent authority in the State.
c. Any other Person as may be d etermined in a resolution issued by the Cabinet at the
suggestion of the Minister.
Chapter Eleven
Tax Loss Provisions
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (37)
Tax Loss Relief
1. A Tax Loss can be offset against the Taxable Income of subsequent Tax Periods to arrive
at the Taxable Income for those subsequent Tax Periods.
2. The amount of Tax Loss used to reduce the Taxable Income for any subsequent Tax Period cannot exceed 75% (seventy -five percent) or any other percentage as specified in
a resolution issued by the Cabinet at the suggestion of t he Minister of the Taxable
Income for that Tax Period before any Tax Loss relief, except in circumstances that may
be prescribed in a resolution issued by the Cabinet at the suggestion of the Minister.
Federal Law No. (47) of 2022 on Corporate and Business Tax 46
3. A Taxable Person cannot claim Tax Loss relief for:
a. Losses incurred before the date of commencement of Corporate Tax.
b. Losses incurred before a Person becomes a Taxable Person under this Decree -Law.
c. Losses incurred from an asset or activity the income of which is exempt, or otherwise
not taken into account unde r this Decree -Law.
4. A Tax Loss carried forward to a subsequent Tax Period shall be set off against the
Taxable Income of that subsequent Tax Period, before any remainder can be carried
forward to a further subsequent Tax Period, or any Tax Loss transferred under Article 38
of this Decree -Law can be utilized.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (38)
Transfer of Tax Loss
1. A Tax Loss or a portion thereof may be offset against the Taxable Income of another
Taxable Person where all of the following conditions are met:
a. Both Taxable Persons ar e juridical persons.
b. Both Taxable Persons are Resident Persons.
c. Either Taxable Person has a direct or indirect ownership interest of at least 75% (seventy -five percent) in the other, or a third Person has a direct or indirect
ownership interest of at least 75% (seventy -five percent) in each of the Taxable
Persons.
d. The joint ownership under paragraph (c) of Clause 1 of this Article must exist from the start of the Tax Period in which the Tax Loss is incurred to the end of the Tax
Period in which the other Taxable Person offsets the Tax Loss transferred against its
Taxable Income.
e. None of the Persons are an Exempt Person.
f. None of the Persons are a Qualifying Free Zone Person.
g. The Fiscal Year of each of the Taxable Persons ends on the same date.
h. Both Taxable Pe rsons prepare their financial statements using the same accounting
standards.
2. Where a Taxable Person transfers its Tax Loss to another Taxable Person under Clause 1
Federal Law No. (47) of 2022 on Corporate and Business Tax 47
of this Article:
a. the Taxable Person which the Tax Loss is transferred to shall reduce its T axable
Income for the relevant Tax Period;
b. the total Tax Loss offset shall not exceed the amount allowed under Clause 2 of
Article 37 of this Decree -Law; and
c. the Taxable Person shall reduce its available Tax Losses by the amount of the Tax
Loss transferred to the other Taxable Person for the relevant Tax Period.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (39)
Limitation on Tax Losses Carryforward
1. Tax Losses can only be carried forward and utilized in accordance with the provision of Clause 2 of Article 37 of this Decree -Law provided that:
a. From the beginning of the Tax Period in which the Tax Loss is incurred to the end of
the Tax Period in which the Tax Loss or part thereof is offset against Taxable Income of that period, the same Person or Persons continuously owned at least a 50% (fifty
percent) ownership interest in the Taxable Person.
b. The Taxable Person continued to conduct the same or a similar Business or Business Activity following a change in ownership of more than 50% (fifty percent).
2. For the purposes of paragraph (b) of Clause 1 of this Article, relevant factors for
determining whether a Taxable Person has continued to conduct the same or a similar
Business or Business Activity following a change in the direct or indirect ownership include:
a. the Taxable Person uses some or all of the s ame assets as before the ownership
change;
b. the Taxable Person has not made significant changes to the core identity or operations of its Business since the ownership change; and
c. where there have been any changes, these result from the development or
exploi tation of assets, services, processes, products or methods that existed before
the ownership change.
3. Clause 1 of this Article shall not apply to a Taxable Person whose shares are listed on a
Federal Law No. (47) of 2022 on Corporate and Business Tax 48
Recognized Stock Exchange.
Chapter Twelve
Tax Group Provisions
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (40)
Tax Group
1. A Resident Person, which for the purposes of this Decree -Law shall be referred to as a
"Parent Company", can make an application to the Authority to form a Tax Group with
one or more other Resident Persons, each referred to as a "Subsidiary" for the purposes
of this Chapter, where all of the following conditions are met:
a. The Resident Persons are juridical persons.
b. The Parent Company owns at least 95% (ninety -five percent) of the share capital of
the Subsidiary, either directly or indire ctly through one or more Subsidiaries.
c. The Parent Company holds at least 95% (ninety -five percent) of the voting rights in
the Subsidiary, either directly or indirectly through one or more Subsidiaries.
d. The Parent Company is entitled to at least 95% (ninet y-five percent) of the
Subsidiary's profits and net assets, either directly or indirectly through one or more
Subsidiaries.
e. Neither the Parent Company nor the Subsidiary is an Exempt Person.
f. Neither the Parent Company nor the Subsidiary is a Qualifying Fre e Zone Person.
g. The Parent Company and the Subsidiary have the same Fiscal Year.
h. Both the Parent Company and the Subsidiary prepare their financial statements
using the same accounting standards.
2. Notwithstanding paragraph (e) of Clause 1 of this Article, on e or more Subsidiaries in
which a Government Entity directly or indirectly owns at least a 95% (ninety - five
percent) ownership interest as specified in paragraphs (b), (c) and (d) of Clause 1 of this Article can form a Tax Group, subject to the conditions to be prescribed by the Authority.
3. An application made under Clause 1 of this Article shall be made to the Authority by the
Parent Company and each Subsidiary seeking to become members of the Tax Group.
4. A Tax Group formed under Clause 1 of this Article is treated as a single Taxable Person
Federal Law No. (47) of 2022 on Corporate and Business Tax 49
for the purposes of this Decree -Law, represented by the Parent Company.
5. The Parent Company shall comply with all obligations set out in Chapters Fourteen,
Sixteen and Seventeen of this Decree -Law on behalf of the Tax Gro up.
6. The Parent Company and each Subsidiary shall be jointly and severally liable for
Corporate Tax Payable by the Tax Group for those Tax Periods when they are members
of the Tax Group.
7. The joint and several liability under Clause 6 of this Article for a T ax Period can be
limited to one or more members of the Tax Group following approval by the Authority.
8. The Parent Company and each Subsidiary shall remain responsible for complying with
the provisions under Article 45 of this Decree -Law.
9. A Subsidiary can jo in an existing Tax Group following submission of an application to
the Authority by the Parent Company and the relevant Subsidiary.
10. A Subsidiary shall leave the Tax Group in the following circumstances:
a. Following approval by the Authority of an application by the Parent Company and
the relevant Subsidiary.
b. Where the relevant Subsidiary no longer meets the conditions to be a member of the Tax Group as specified in Clause 1 of this Article.
11. A Tax Group shall cease to exist in any of the following circumstance s:
a. Following approval by the Authority of an application by the Parent Company.
b. Where the Parent Company no longer meets the conditions to form a Tax Group as
specified in Clause 1 of this Article, subject to the provisions of Clause 12 of this
Article.
12. The Parent Company of a Tax Group can make an application to the Authority to be
replaced by another Parent Company without a discontinuation of the Tax Group, in any
of the following circumstances.
a. The new Parent Company meets the conditions under Clause 1 of this Article relating
to the former Parent Company.
b. The former Parent Company ceases to exist and the new Parent Company or a Subsidiary is its universal legal successor.
13. Notwithstanding Clauses 11 and 12 of this Article, the Authority may, at its discr etion,
Federal Law No. (47) of 2022 on Corporate and Business Tax 50
dissolve a Tax Group or change the Parent Company of a Tax Group based on
information available to the Authority, and notify the Parent Company of such action
taken.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (41)
Date of Formation and Cessation of a Tax Group
1. For the purposes of Art icle 40 of this Decree- Law, a Tax Group shall be formed, or a new
Subsidiary shall join an existing Tax Group from the beginning of the Tax Period specified in the application submitted to the Authority, or from the beginning of any
other Tax Period determ ined by the Authority.
2. For the purposes of paragraph (a) of Clause 10 of Article 40 and paragraph (a) of Clause
11 of Article 40 of this Decree -Law, the relevant member of a Tax Group shall be treated
as leaving that Tax Group from the beginning of the Tax Period specified in the
application submitted to the Authority, or from the beginning of any other Tax Period
determined by the Authority.
3. For the purposes of paragraph (b) of Clause 10 of Article 40 and paragraph (b) of Clause 11 of Article 40 of this De cree- Law, the relevant member of a Tax Group shall be treated
as leaving that Tax Group from the beginning of the Tax Period in which the conditions
under Clause 1 of Article 40 of this Decree -Law are no longer met.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (42)
Taxable Income of a Tax Gro up
1. For the purposes of determining the Taxable Income of a Tax Group, the Parent
Company shall consolidate the financial results, assets and liabilities of each Subsidiary
for the relevant Tax Period, eliminating transactions between the Parent Company and
each Subsidiary that is a member of the Tax Group.
2. The relevant provisions of this Decree -Law shall apply as the context requires to the Tax
Group.
3. Unutilized Tax Losses of a Subsidiary that joins a Tax Group (referred to in this Article as
"pre- Grouping Tax Losses") shall become carried forward Tax Losses of the Tax Group,
Federal Law No. (47) of 2022 on Corporate and Business Tax 51
and can be used to offset the Taxable Income of the Tax Group insofar as this income is
attributable to the relevant Subsidiary.
4. Where a new Subsidiary joins an existing Tax Group, Unut ilized Tax Losses of the
existing Tax Group cannot be used to offset the Taxable Income of the Tax Group insofar this income is attributable to the new Subsidiary.
5. The application of Clauses 3 and 4 of this Article is subject to the conditions of Articles 37 and 39 of this Decree -Law.
6. Where a Subsidiary leaves a Tax Group, Tax Losses of the Tax Group shall remain with
the Tax Group, with the exception of any Unutilized pre -Grouping Tax Losses of the
relevant Subsidiary.
7. On cessation of a Tax Group, Unutiliz ed Tax Losses of the Tax Group shall be allocated
as follows:
a. Where the Parent Company continues to be a Taxable Person, all Tax Losses shall
remain with the Parent Company.
b. Where the Parent Company ceases to be a Taxable Person, Tax Losses of the Tax
Grou p shall not be available for offset against future Taxable Income of individual
Subsidiaries, with the exception of any Unutilized pre -Grouping Tax Losses of such
Subsidiaries.
8. Paragraph (b) of Clause 7 of this Article shall not apply where there is a cont inuation of
the Tax Group under Clause 12 of Article 40 of this Decree -Law.
9. Clause 1 of this Article shall not apply where an asset or liability has been transferred
between members of the Tax Group and either the transferor or transferee leaves the
Tax Gr oup within (2) two years from the date of the transfer, unless the associated
income would have been exempt from Corporate Tax or not taken into account under any other provisions of this Decree -Law.
10. Any income that was not taken into account with regards to a transfer described in
Clause 9 of this Article shall be taken into account on the date the transferor or
transferee leaves the Tax Group, and shall result in a corresponding adjustment of the
cost base for Corporate Tax purposes of the relevant asset or liability.
11. The Tax Group shall prepare consolidated financial statements in accordance with
Federal Law No. (47) of 2022 on Corporate and Business Tax 52
accounting standards applied in the State.
Chapter Thirteen
Calculation of Corporate Tax Payable
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (43)
Currency
For the purposes of this Decree -Law, all amounts shall be quantified in the United Arab
Emirates dirham. Any amount quantified in another currency shall be converted at the
applicable exchange rate set by the Central Bank of the United Arab Emirates, subject to any
conditions that may be prescribed in a decision issued by the Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (44)
Calculation and Settlement of Corporate Tax
The Corporate Tax due under this Decree -Law shall be settled in the following order:
1. First, by using the Taxable Person's available Withholding Tax Credit, as deter mined
under Article 46 of this Decree -Law.
2. To the extent that there is a residual amount after Clause 1 of this Article, by using the
Taxable Person's available Foreign Tax Credit as determined under Article 47 of this
Decree- Law.
3. To the extent that there is a residual amount after Clause 2 of this Article, by using any
credits or other forms of relief as specified in a resolution issued by the Cabinet at the suggestion of the Minister.
4. To the extent that there is a residual amount after Clause 3 of this Ar ticle, this amount of
Corporate Tax Payable shall be settled in accordance with Article 48 of this Decree -Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (45)
Withholding Tax
1. The following income shall be subject to Withholding Tax at the rate of 0% (zero percent) or any other rate as spe cified in a resolution issued by the Cabinet at the
Federal Law No. (47) of 2022 on Corporate and Business Tax 53
suggestion of the Minister:
a. The categories of State Sourced Income derived by a Non -Resident Person as
prescribed in the resolution issued by the Cabinet pursuant to this Article, insofar as
such income is not attributable to a Permanent Establishment of the Non -Resident
Person in the State.
b. Any other income as specified in a resolution issued by the Cabinet at the suggestion
of the Minister.
2. The Withholding Tax payable under Clause 1 of this Article shall be deducted from the
gross amount of the payment and shall be remitted to the Authority in the form and
manner and within the timeline prescribed by the Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (46)
Withholding Tax Credit
1. If a Person becomes a Taxable Person in a Tax Period, t he Person's Corporate Tax due
under Article 3 of this Decree -Law can be reduced by the amount of the Withholding Tax
Credit for that Tax Period.
2. The maximum Withholding Tax Credit under this Decree -Law is the lower of:
a. The amount of Withholding Tax deducte d under Clause 2 of Article 45 of this
Decree- Law.
b. The Corporate Tax due under this Decree -Law.
3. Any excess Withholding Tax Credit for a Tax Period as a result of Clause 2 of this Article shall be refunded to the Taxable Person in accordance with Article 49 of this
Decree- Law.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (47)
Foreign Tax Credit
1. Corporate Tax due under Article 3 of this Decree -Law can be reduced by the amount of
Foreign Tax Credit for the relevant Tax Period.
2. The Foreign Tax Credit under this Decree -Law cannot exceed the amount of Corporate
Tax due on the relevant income.
Federal Law No. (47) of 2022 on Corporate and Business Tax 54
3. Any unutilized Foreign Tax Credit as a result of Clause 2 of this Article cannot be carried
forward or carried back.
4. A Taxable Person shall maintain all necessary records for the purposes of claiming a Foreign T ax Credit.
Chapter Fou rteen
Payment and Refund of Corporate Tax
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (48)
Corporate Tax Payment
A Taxable Person shall settle the Corporate Tax Payable under this Decree -Law within (9)
nine months from the end of the relevant Tax Period, or by such other date as determined by
the Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (49)
Corporate Tax Refund
1. A Taxable Person may submit an application to the Authority for a Corporate Tax refund in accordance with the provisions of the Tax Procedures Law in the following
circumstances:
a. The Withho lding Tax Credit available to a Taxable Person exceeds the Taxable
Person's Corporate Tax Payable.
b. Where the Authority is otherwise satisfied that the Taxable Person has paid
Corporate Tax in excess of the Taxable Person's Corporate Tax Payable.
2. The Author ity shall issue the Taxable Person a notice of the Authority's decision on an
application under Clause 1 of this Article in accordance with the Tax Procedures Law.
Chapter fifteen
Anti -Abuse Rules
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (50)
General Anti- abuse Rule
Federal Law No. (47) of 2022 on Corporate and Business Tax 55
1. This Article applies to a t ransaction or an arrangement if, having regard to all relevant
circumstances, it can be reasonably concluded that:
a. the entering into or carrying out of the transaction or arrangement, or any part
thereof, is not for a valid commercial or other non -fiscal r eason which reflects
economic reality; and
b. the main purpose or one of the main purposes of the transaction or arrangement, or
any part thereof, is to obtain a Corporate Tax advantage that is not consistent with
the intention or purpose of this Decree -Law.
2. For the purposes of this Article, a Corporate Tax advantage includes, but is not limited to,
the following:
a. A refund or an erroneous refund of Corporate Tax.
b. Avoidance or reduction of Corporate Tax Payable.
c. Deferral of the payment of Corporate Tax or exped iting its refund.
d. Avoidance of an obligation to deduct or compute the Corporate Tax.
3. Where the provisions of this Article apply to a transaction or arrangement, the Authority
may make a determination that one or more specified Corporate Tax advantages
obta ined as a result of the transaction or arrangement are to be counteracted or
adjusted.
4. If a determination is made under Clause 3 of this Article, the Authority shall issue an assessment giving effect to the determination, which may include:
a. allowing or dis allowing any exemption, deduction or relief in calculating the Taxable
Income or the Corporate Tax Payable, or any part thereof;
b. allocating any such exemption, deduction or relief, or any part thereof, to any other Persons;
c. recharacterizing, for the purpos es of this Decree- Law, the nature of any payment or
other amount, or any part thereof; or
d. disregarding the effect that would otherwise result from the application of other
provisions of this Decree -Law, and can make compensating adjustments to the
Corporat e Tax liability of any other Person affected by the determination made by
the Authority.
Federal Law No. (47) of 2022 on Corporate and Business Tax 56
5. For the purpose of determining whether this Article applies to a transaction or
arrangement, the following shall be considered:
a. The manner in which the transaction or arrangement was entered into or carried out.
b. The form and substance of the transaction or arrangement.
c. The timing of the transaction or arrangement.
d. The result of the transaction or arrangement in relation to the application of this
Decree- Law.
e. Any change in the financial position of the Taxable Person that has resulted, will
result, or may reasonably be expected to result, from the transaction or arrangement.
f. Any change in the financial position of another Person that has resulted, will result,
or may reas onably be expected to result, from the transaction or arrangement.
g. Whether the transaction or arrangement has created rights or obligations which
would not normally be created between Persons dealing with each other at arm's
length in respect of the relevant transaction or arrangement.
h. Any other relevant information and circumstances.
6. In any proceeding concerning the application of this Article, the Authority shall demonstrate that the determination made under Clause 3 of this Article is just and
reasonable .
Chapter Sixteen
Tax Registration and Deregistration
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (51)
Tax Registration
1. Any Taxable Person shall register for Corporate Tax with the Authority in the form and
manner and within the timeline prescribed by the Authority and obtain a Tax
Registration N umber, except in circumstances prescribed by the Minister.
2. For the purposes of an exemption from Corporate Tax under this Decree -Law or for
purposes of Clause 6 of Article 53 of this Decree -Law, the Authority may require the
relevant Person under paragraphs (e), (f), (g), (h) and (i) of Clause 1 of Article 4 of this
Decree- Law, or the Unincorporated Association, as applicable, to register for Corporate
Federal Law No. (47) of 2022 on Corporate and Business Tax 57
Tax and obtain a Tax Registration Number.
3. The Authority shall, at its discretion and based on the informat ion available to the
Authority, have the ability to register a Person for Corporate Tax effective from the date
the Person became a Taxable Person.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (52)
Tax Deregistration
1. A Person with a Tax Registration Number shall file a Tax Deregistration ap plication with
the Authority where there is a cessation of its Business or Business Activity, whether by
dissolution, liquidation, or otherwise, in the form and manner and within the timeline
prescribed by the Authority.
2. A Taxable Person shall not be dereg istered unless it has paid all Corporate Tax and
Administrative Fines due and filed all Tax Returns due under this Decree -Law, including
its Tax Return for the Tax Period up to and including the date of cessation.
3. If the Tax Deregistration application is approved, the Authority shall deregister the Person for Corporate Tax purposes with effect from the date of cessation or from such other date as may be determined by the Authority.
4. Where a Person does not comply with the Tax Deregistration requirements unde r this
Article, the Authority may, at its discretion and based on information available to the
Authority, deregister the Taxable Person effective from the later of either:
a. the last day of the Tax Period in which it became apparent to the Authority that the
conditions under Clause 2 of this Article have been met; or
b. the date the Taxable Person ceases to exist.
Chapter Seventeen
Tax Returns and Clarifications
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (53)
Tax Returns
1. Subject to Article 51 of this Decree -Law, a Taxable Person shall file a Tax Return, as
Federal Law No. (47) of 2022 on Corporate and Business Tax 58
applicable, to the Authority in the form and manner prescribed by the Authority no later
than (9) nine months from the end of the relevant Tax Period, or by such other date as
directed by the Authority.
2. The Tax Return shall include at least the following information, as applicable:
a. The Tax Period to which the Tax Return relates.
b. The name, address and Tax Registration Number of the Taxable Person.
c. The date of submission of the Tax Return.
d. The accounting basis used in the financial statements.
e. The Taxable Income for the Tax Period.
f. The amount of Tax Loss relief claimed under Clause 1 of Article 37 of this
Decree- Law.
g. The amount of Tax Loss transferred under Article 38 of this Decree -Law.
h. The available tax credits claimed under Articles 46 and 47 of this De cree- Law.
i. The Corporate Tax Payable for the Tax Period.
3. A Taxable Person shall provide the Authority with any such information, documents or records as shall be reasonably required by the Authority for the purposes of
implementing the provisions of this De cree- Law.
4. Notwithstanding the provisions of this Article and any other relevant provision of this Decree- Law, the Minister may prescribe the form and manner in which a Tax Return and
other information are to be filed with the Authority by a Taxable Person where the
disclosure of information may impede national security or may be contrary to the public
interest.
5. The Authority may request a Person under paragraphs (e), (f), (g), (h) and (i) of Clause 1
of Article 4 of this Decree -Law to submit a declaration.
6. The Authority may, by notice or through a decision issued by the Authority, request the
authorized partner in an Unincorporated Association whose application to become
subject to corporate tax under Clause 8 of Article 16 of this Decree -Law was not
approve d, to file a declaration on behalf of all the partners in the Unincorporated
Association.
7. The Parent Company shall file a Tax Return to the Authority on behalf of the Tax Group.
Federal Law No. (47) of 2022 on Corporate and Business Tax 59
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (54)
Financial Statements
1. The Authority may, by notice or through a de cision issued by the Authority, request a
Taxable Person to submit the financial statements used to determine the Taxable Income
for a Tax Period in the form and manner and within the timeline prescribed by the
Authority.
2. The Minister may issue a decision requiring categories of Taxable Persons to prepare and
maintain audited or certified financial statements.
3. For the purposes of Clause 1 of this Article, the Authority may request a partner in an
Unincorporated Association to provide financial statements sh owing all of the following:
a. The total assets, liabilities, income and expenses of the Unincorporated Association.
b. The partner's distributive share in the Unincorporated Association's assets, liabilities,
income and expenses.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (55)
Transfer Pricing Documentation
1. The Authority may, by notice or through a decision issued by the Authority, require a
Taxable Person to file together with their Tax Return a disclosure containing information
regarding the Taxable Person's transactions and arrangements with its Related Parties and Connected Persons in the form prescribed by the Authority.
2. If a Taxable Person's transactions with its Related Parties and Connected Persons for a Tax Period meet the conditions prescribed by the Minister, the Taxable Person shall
maintain both a master file and a local file in the form prescribed by the Authority.
3. The documentation under Clause 2 of this Article shall be submitted to the Authority
within (30) thirty days following a request by the Authority, or by any such other late r
date as directed by the Authority.
4. Upon a request by the Authority, a Taxable Person shall provide the Authority with any information to support the arm's length nature of the Taxable Person's transactions or
arrangements with its Related Parties and Con nected Persons, within (30) thirty days
following the request by the Authority, or by any such other later date as directed by the
Federal Law No. (47) of 2022 on Corporate and Business Tax 60
Authority.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (56)
Record Keeping
1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shall
maint ain all records and documents for a period of (7) seven years following the end of
the Tax Period to which they relate that:
a. Support the information to be provided in a Tax Return or in any other document to be filed with the Authority.
b. Enable the Taxable Person's Taxable Income to be readily ascertained by the Authority.
2. Notwithstanding the provisions of the Tax Procedures Law, an Exempt Person shall
maintain all records that enable the Exempt Person's status to be readily ascertained by
the Authority for a period of (7) seven years following the end of the Tax Period to which
they relate.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (57)
Tax Period
1. A Taxable Person's Tax Period is the Fiscal Year or part thereof for which a Tax Return is required to be filed.
2. For the purposes of this Decree -Law, the Fiscal Year of a Taxable Person shall be the
Gregorian calendar year, or the (12) twelve -month period for which the Taxable Person
prepares financial statements.
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (58)
Change of Tax Period
Notwithstanding Article 57 of this Decree -Law, a Tax able Person can make an application to
the Authority to change the start and end date of its Tax Period, or use a different Tax Period, subject to the conditions to be set by the Authority.
Federal Law No. (47) of 2022 on Corporate and Business Tax 61
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (59)
Clarifications
1. A Person may make an application to th e Authority for a clarification regarding the
application of this Decree -Law or the conclusion of an advance pricing agreement with
respect to a transaction or an arrangement proposed or entered into by the Person.
2. The application under Clause 1 of this Ar ticle shall be made in the form and manner
prescribed by the Authority.
Chapter Eighteen
Violations and Penalties
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tax | Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax | Article (60)
Assessment of Corporate Tax and Fines
1. A Person may be subject to a Corporate Tax assessment in accordance with the Tax
Procedures Law and the decisions issued in the implementation of its provisions.
2. Notwithstanding the provisions of the Tax Procedures Law and the resolutions issued for the implementation of its provisions, the Authority may prescribe the circumstances
and conditions unde r which a Corporate Tax assessment may be requested by a Taxable
Person or issued by the Authority.
3. The Tax Procedures Law referred to in the preamble and the resolutions issued for the
implementation of its provisions shall determine the relevant penaltie s and fines
relevant to the implementation of this Decree -Law.
Chapter Nineteen
Transitional Rules
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