Executive Regulation for Tax Procedures

The Cabinet has decided:

• Having reviewed the Constitution;
• Federal Law No. 1 of 1972 on the Competencies of the Ministries and Powers of the Ministers and its amendments;
• Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax
  Authority;
• Federal Law No. 7 of 2017 on Tax Procedures;
• Based on what was presented by the Minister of Finance and approved by the Cabinet,

Keeping Accounting Records and Commercial Books

1. Accounting Records and Commercial Books shall include the following:
   Accounting books in relation to that Business, which include records of payments and receipts, purchases and sales, revenues and expenditures, and any business, and any matters as required under any Tax Law or any other applicable law, including:
   1) Balance sheet and profit and loss accounts.
   2) Records of wages and salaries.
   3) Records of fixed assets.
   4) Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.
   
   Additional records as may be required in the Tax Law and its Executive Regulation.

2. In addition to the Accounting Records and Commercial Books mentioned in Clause
   (1) of this Article, the Authority may require any other information in order to confirm, through an audit trail, the Person’s Tax obligations, including any liability to register for Tax purposes.

Period of Record-Keeping

1. Every Person holding and maintaining any of the records mentioned in Article 2 of this Decision, shall keep these records in a manner that enables the Authority, or an officer authorised by the Authority, to ascertain that Person’s Tax obligations, as follows:
   • For a period of 5 years after the end of the Tax Period to which they relate in the case of a Taxable Person.
   • For a period of 5 years from the end of the calendar year in which the concerned document was created in the case of non-Taxable Persons.
   • For a period specified in the Tax Law for real estate records.
2. The Authority may, before the expiry of the period inform the Person to retain the records for a further period not exceeding 4 years, in cases where he is required to do so including the following:
   • If the Taxable Person’s tax obligations are subject to a dispute between him and the Authority.
   • If the Person is being subject to a Tax Audit and that Tax Audit has not yet been completed.
   • If the Authority has given notice to the Person that it intends to conduct a Tax Audit before the expiry of the period specified in Claus.

Where a Person enters into bankruptcy proceedings, his Legal Representative is required to keep the records of that Person for 12 months from the date on which those proceedings have come to an end.

Authority require the records to be kept for a longer period, it may take possession of them, at a time agreed with the Legal Representative responsible for the relevant bankruptcy proceedings.

How to Keep Accounting Records and Commercial Books

1. Unless otherwise required by the Tax Law, the obligation to maintain Accounting Records and Commercial Books shall be met through any of the following:
   • Creating the record and the retention of original Documents which support the entries contained in the record.
   • Creating the record and preserving the information that was contained in the original document, provided that:
   • The information matches the data contained in the original document, and shall be available during the periods referred to in Article 3 of this Decision.
   • The information retained or stored in either photocopy or electronic form, and an easily readable copy of it can be reproduced within a reasonable period, if requested by the Authority.
2. The Authority may lay down the rules of preserving information contained in Accounting Records and Commercial Books, and impose such reasonable requirements for ensuring that the information will be as readily available to it as if the original records themselves had been preserved.

The use of a language other than the Arabic

1. Tax Return, data, information, records and other Documents related to any Tax shall be submitted to the Authority in Arabic, as per the mechanism specified by the Tax Law.
2. As an exception to Clause (1) of this Article, the Authority may accept data, information, records and other Documents related to any Tax to be submitted to it in English; the Authority may, at its discretion, request the Person to translate some or all of these to Arabic.
3. Where the data, information, records and other Documents related to any Tax are issued in any foreign language other than English, the Person is required to submit these Documents to the Authority as translated into Arabic.
4. The Person submitting any translation of data, information, records and other Documents related to any Tax to the Authority shall be liable for the accuracy and correctness of the translation, and shall bear all associated costs. The Authority shall have the right to rely on the translation provided.

Procedures of Tax Registration, De-registration and Amending Details of Registration

The following procedures with respect to tax registration and de-registration shall be
followed:

1. A Tax Registration application shall be submitted by the non-registered Taxable Person or any other Person who has the right to be registered to the Authority according to the forms adopted by the Authority in this regard.
2. A Tax de-registration application shall be submitted to the Authority by the Registrant who is required or has the right, to be deregistered based on the forms adopted by the Authority in this regard.
3. The Authority shall review the tax registration or de-registration application in accordance with the rules adopted in this regard.
4. Tax registration or de-registration shall be finalised by issuing the Tax Registration Number for the applicant, or cancelling this number, or reactivating the Tax Registration Number if the Authority re-registers a Person, as the case may be.
5. The Authority shall notify the Person of his tax registration or de-registration or the reactivation of his registration based on the mechanism adopted thereby in this regard.
6. A Registrant shall within 20 business days notify the Authority of any of the following:
   • Any change to the name, address, articles of association, or nature of the Business of that Registrant.
   • Any change to the address from which any Business is conducted by that Registrant.
7. The Government body responsible for issuing business licences shall inform the Authority in writing of any licences that has been issued thereby on the form specified by the Authority, within 20 business days from issuing the licence, provided that such notification includes the following:
   • The name of the business.
   • The type of commercial licence.
   • The commercial licence number.
   • The date of issuance of the commercial license.
   • The registered address of the business.
   • Description of the activities of the business.
   • The details of the owners and directors of the business.
   • Any other information requested by the Authority.

8. Any Person appointed as a Legal Representative is required to give a notice of his appointment to the Authority within 20 business days from the appointment date, such notice shall be in writing or by the form determined by the Authority, and shall include the following:
   • The type of appointment.
   • The Person’s responsibilities.
   • The duration of the appointment, in the case of fixed-term appointment.
   • The name, address and Tax Registration Number, if applicable, of the Taxable
     Person who is represented by the Legal Representative.
   • The name and address of the Legal Representative.
   • The legal basis of the appointment.
9. When a notice is given in accordance with Clause (8) of this Article, it shall be accompanied by appropriate evidence of the appointment of the Legal Representative, such as a copy of the document that states the legal basis for the
   appointment.
10. The Authority may request further information from the applicant about the appointment of the Legal Representative and may obtain from other persons information relating to the appointment in order to verify the details of the appointment.
11. Where the Authority accepts the appointment of the Legal Representative, it will notify the Legal Representative of the acceptance of his appointment within 20 business days as of such acceptance.

Tax Obligations

Allocation of Unidentified payments

1. If the Taxable Person settles any amount to the Authority without specifying the type of Tax or Tax Period to which it relates, the Authority may allocate the amount for settling any debts or liabilities due to the Authority based on seniority.
2. If the amount received by the Authority under Clause (1) of this Article, exceeds the Taxable Person’s existing liabilities, the Authority shall treat the excess amount received as a credit against future liabilities of the Taxable Person, where the Taxable Person did not request the excess amount to be returned.
3. The Authority shall notify the Taxable Person regarding the allocation of payments according to Clause (1) of this Article.

Voluntary Disclosure

Time Limits for Voluntary Disclosure

1. If a Taxable Person becomes aware that a Tax Return submitted by him to the Authority or a Tax Assessment sent to him from the Authority are incorrect, resulting in a calculation of the Payable Tax according to the Tax Law being less
   than required by more than 10,000 Dirhams, the Taxable Person shall make a Voluntary Disclosure to the Authority within 20 business days from the date when the Taxable Person became aware of the error.
2. If a Taxable Person becomes aware that a Tax Return submitted by him to the Authority or a Tax Assessment sent to him from the Authority is incorrect, resulting in a calculation of Payable Tax according to the Tax Law being less than required by not more than 10,000 Dirhams, the Taxable Person shall make the following:
   a. To correct the error in the Tax Return for the Tax Period in which the error has been discovered, if the Taxable Person is obligated to submit a Tax Return to the Authority for this Tax Period.
   b. The Taxable Person shall make a Voluntary Disclosure to the Authority within 20 business days from the date of becoming aware of the error, if there is no Tax Return through which the error can be corrected according to paragraph (a) of this Clause.
3. If a Taxpayer becomes aware that a Tax refund application that he has submitted to the Authority is incorrect, resulting in a calculation of a refund to which he is entitled according to the Tax Law being more than the correct amount, the Taxpayer shall make a Voluntary Disclosure to the Authority within 20 business days from the date when the Taxpayer becomes aware of the error, unless the error was a result of an incorrect Tax Return or Tax Assessment, then provisions of Clauses (1) and (2) shall apply.
4. For the purposes of implementing this Article, a Voluntary Disclosure must be made in accordance with the form directed by the Authority.

Procedures for listing a Tax Agent in the Register and Rights and Obligations of Tax Agents

1. Anyone requesting to be listed in the Register shall satisfy the following conditions:
   a. To be of good conduct and behavior and to have never been convicted of a crime or misdemeanor prejudicial to honour or honesty, irrespective of whether or not he may have been rehabilitated.
   b. To hold at least a certified bachelor or Master degree in tax, accounting or law from a recognised educational institution, or a bachelor degree in any field plus a tax certification as accepted from an internationally known tax institute.

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