Taxes are the source of income for any nation. In any nation, taxes support the nation in providing revenue and this income is collected from the citizens and the residents of the country. In the UAE, the main income source is from oil reserves. The taxes are charged so that it reduces the nation’s dependence on oil reserves and diversifies the nation’s resources. These are important for administrators to give citizens and expats exceptional public services. The Federal Tax Authority in UAE is the body which regulates, collects, and implements the tax system throughout the country.
The federal tax authority was established under Federal law by Decree No. 13 of 2016. These authorities are responsible for managing, controlling and collecting federal taxes. The UAE tax authority is also responsible for collecting penalties, distributing tax revenues and also implementing tax formalities in the UAE.
The UAE tax authorities, the government entities responsible for administering and enforcing federal taxes. In the year 2016 the president of UAE, his highness Sheikh Khalifa Bin Zayed Al Nahyan via Federal Decree Law 13 of 2016.
The headquarters of federal tax authorities is located in Abu Dhabi. A public federal governing authority is set up under the Federal tax authority. The federal tax authority is in charge of managing penalties, distribution of taxes generated by the revenue, application of the taxes and their tax procedures are in effect in the country.
The federal tax authority, UAE has its offices in Dubai and Abu Dhabi. The federal tax authority in the UAE is managed by the board of directors and the chairman is the Minister of Finance. The staff members are appointed and paid through the cabinet resolution and these members are nominated by the chairman. The federal tax authority has an independent annual budget which is deemed as a public fund & exempt from tax & fee.
Mission of Federal Tax Authority
The following points are the mission of the Federal Tax Authority.
- Promote growth of economy and sustainable development in the UAE
- Growth of UAE’s income besides oil revenue
- To reduce dependency on oil generated income
- Getting Economic Diversification with advanced financial practice
- Assisting the business entrepreneurs and the end users about the significance of tax responsibility
Along with the above listed points, the FTA UAE, levies taxes on products & services that are detrimental to the health of mankind. Penalties are also levied on consumers as well as business units which do not pay taxes and report taxes on time.
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Types of Taxes levied by Federal Tax authority UAE
There are two types of taxes levied by the authorities which are as follows:
- Value Added Tax (VAT)
- Excise Tax
Value Added Tax
The UAE VAT Law, is indirect tax which is applicable based on transaction at each stage of supply of product. The expenses related to the VAT are borne by the customer and the business accumulates the taxes on behalf of the Federal tax authority. The tax income provides a source in giving an advanced service facility to the residents of UAE. Currently, the VAT levied in the UAE is 5%.
Excise tax applies to products that are harmful to human health. The tax is levied on tobacco products and carbon drinks. Business units which are into imports, manufacturing or issuing the goods should get registered with the Federal Tax Authority. The excise tax imposition is directed towards reducing the goods consumption and also aims to increase the government tax income which is used on providing services to the public.
Federal Tax authority E-services
The federal tax authority provides e-services which are helpful to the business to register and file tax returns more efficiently.
The following are the E-services by FTA
- VAT registration
- VAT amendment
- VAT de-registration
- VAT & Excise tax import declaration
- VAT & Excise tax refunds
- VAT & Excise tax returns
To avail E-services you should register on the Federal Tax authority Web portal and then you can get access to the UAE tax system. The website has detailed information just fill up the online application form and register for the services to avail the benefits.
The FTA website provides clear answers to all your queries. Refer to the FAQ section and you will find answers to your questions. You can also visit the office in Abu Dhabi or Dubai. Below is the detailed address and information.
- Location: Central Park – Business Tower – Dubai
- Contact: +971-60-059-9994
- Working hours: Sunday to Thursday: 08:00 am – 04:00 pm
ABU DHABI OFFICE
- Location: Emirates Property Investment Company Building – Abu Dhabi
- Contact: +971-60-059-9994
- Working hours: Sunday to Thursday: 08:00 am – 02:00 pm