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TAX - Special Editon

Tax Alert - November 2019


Country by Country Reporting

Notification Link released by the Ministry of Finance 

The UAE Ministry of Finance (‘MoF’) has now published the Country by Country Reporting (‘CbCR’) notification link. 

The notification requirement applies to multinational group entities whose gross consolidated turnover for the group exceeds threshold of AED 3.15 billion (US$857 million). All the subsidiaries, affiliates and branches within multinational groups will be required to fulfill with the notification compliance requirement.


Details to be filled out in the portal includes the following:

  1. Preliminary information i.e. confirmation on whether the entity is a:
    • UAE Tax Resident;
    • part of a Multinational Group (headquartered either in the UAE or outside of the UAE) with a consolidated group turnover of AED 3.15 billion or more during the preceding financial year
  1. Section I: Details of Ultimate Parent Entity
  2. Section II: Details of Reporting Entity
  3. Section III: Details of Constituent Entities in UAE
  4. Section IV: Contact Details

In addition, the Constituent Entities template for CbCR purposes has been released by the UAE MoF which require the following details to be provided:

  1. Name of the Entity
  2. Type of ID
  3. ID Number

CbCR notification must be submitted no later than the last day of the financial reporting year of the multi- national entity (‘MNE’). Accordingly, for the MNE Group’s financial year starting on 1 January 2019, CbCR notification should be submitted in the UAE by no later than 31 December 2019.

The notification link can be accessed by clicking here


Economic Substance Requirement (‘ESR’)

Recently, the UAE MoF issued Cabinet resolution No. 58 of 2019 determining the Regulatory Authorities which will manage each of the nine ‘Relevant Activities’ affected by the Economic Substance Requirements that were enacted in April through the Cabinet Resolution No. 31.

Details of the Regulatory Authorities which will oversee Relevant Businesses are highlighted below:

  1. Banking and lease finance businesses established in the mainland - concerned Regulatory Authority is the UAE Central Bank
  2. Businesses established in the Free Zone – concerned Regulatory Authority is the free zone wherein the businesses are issued licenses to carry out Relevant Activities
  3. Insurance businesses (mainland) - concerned Regulatory Authority is the Insurance Authority
  4. Investment Fund Management businesses – concerned Regulatory Authority is the Securities and Commodities Authority
  5. Distribution and Service Center, headquarters, shipping, intellectual property businesses in the mainland – concerned Regulatory Authority is the Ministry of Economy


Regulatory Authorities are expected to provide further guidance regarding the time, format and manner of the notifications and reports.


Excise Tax

Press Release: 782 Businesses registered for Excise Tax, higher compliance with tax returns requirements requested

H.E. Khalid Al Bustani drew attention to the significant improvement in compliance with Excise Tax Returns requirements two years after the levy went into effect, revealing that the number of businesses registered with the Federal Tax Authority (‘FTA’) for Excise Tax has risen to 782. H.E. urged businesses that are subject to Cabinet Decision No. (52) of 2019 to register in the FTA’s electronic system well ahead of December 1, 2019, noting that early registration would help businesses avoid violations and consequent obstacles.

The press release can be accessed by clicking here

Press Release: Expansion on Excise Tax comes into effect from December 1, minimum Excise Tax implemented

Four months ago, the FTA began accepting applications from producers, importers, stockpilers of sweetened drinks, electronic smoking devices and tools as well as the liquids used in these devices, to register for Excise Tax. The FTA streamlined the procedures for registering Excise Goods via its website, calling on businesses to review the required documents and pre-requisites to register Excise Goods, and prepare all forms before submitting their applications.

The FTA launched a new electronic system to facilitate registration of Excise Goods, in addition to updating the application forms for periodic Excise Tax Statements and Returns. FTA also called on all stakeholders to abide by the new procedures to register Excise Goods in the FTA system, review the necessary documents, requirements and prepare all forms and papers before submitting applications.

The scope of Excise Tax also includes sweetened drinks, electronic smoking devices, tools, liquids used in these devices, adding these items to the list of products that have been subject to Excise Tax since it first came into effect in October 2017, which included tobacco and tobacco products, energy drinks, and carbonated beverages.

The press release can be accessed by clicking here

Press Release: FTA approves procedure for VAT refunds on Building New Homes for UAE Citizens in Board Meeting

The Board adopted a new procedure to facilitate VAT refund requests for UAE nationals on the construction of their new residences, in line with the leadership’s vision to develop a modern housing system. The FTA has decided to minimise auditing requirements on applications approved by housing finance authorities.

The Board also adopted a decision allowing tourists who meet all requirements and are legally eligible to recover the VAT they incurred on their purchases to collect the cash amounts up to a year from their departure from the UAE, in the event where they validated their tags but could not collect the cash immediately upon exiting.

The press release can be accessed by clicking here