How can a Taxable Entity resolve a Tax Dispute in the United Arab Emirates?

Even if a taxable entity is particular about the submission of taxes, there can be errors made. Then the taxable entity has to resolve this dispute relating to the taxes. This can be a lengthy and complicated process in some cases. This article will help a taxable entity to resolve such disputes in the future.

 The process to Resolve Tax Disputes

This process comprises mainly 3 steps. After following the three steps the various taxable entities will be able to resolve their taxable disputes. The three steps in the process are described below:

Step No 1: Submitting the Application

The first step is that the taxpayer needs to submit an application titled ‘Application for Reconsideration’. This application can be addressed directly to the Federal Tax Authority (FTA). There are certain prerequisites for this application to be valid. These are:

1. The submission of the application needs to be made within 20 business days from the day the Federal Tax Authority (FTA) has made the decision. This can be seen in the Federal Tax Authorities’ decision notification.
2. The taxable entity needs to provide some legitimate reasons as to why the decision of the authority should be reconsidered. Each legislative reference should provide a reason for their reconsideration.
3. The submission should be made to the Federal Tax Authority in the Arabic language as the submission of the application in the English language will not be accepted. The taxable entity can submit the application via the Federal Tax Authority public website.

Step No 2: Tax Disputes Resolution Committee (TDRC)

There can be cases where both the taxable entity and the Federal Tax Authority do not reach a similar conclusion and this can create more conflict between them. Then in such a case, the taxable entity can submit an objection to the Tax Disputes Resolution Committee (TDRC). The TDRC works outside the bounds of the Ministry of Finance and is headed by judges which come under the purview of the Ministry of Justice and the Cabinet.

In order to make the objection, the following must be done:

1. All the outstanding taxes and penalties of the entity must be paid.
2. The application of reconsideration must reach the FTA
3. All the objections must be made within 20 business days
4. The objection form for the TDRC must be filled.
5. All the supporting documents for the claims should be included. These documents include:
   1. The evidence that all the taxes and penalties are paid
   2. All the responses of the authority
   3. The copy of the application for Reconsideration which has been submitted to the Federal Tax Authority
   4. The proof of the original decision by the Federal Tax Authority.

The TDRC will analyse all the data provided and will pronounce a decision within 20 business days. However, some cases can be quite vexing and these may take a longer time.

Step No 3: Making Appeal to the Judiciary (if required)

In case the decision made by the TDRC is less than AED 100000, the decision is considered final. But in case the decision made by the TDRC is greater than AED 100000, then the taxable entity can make an appeal to the Federal court in Abu Dhabi. This appeal needs to be made within 20 business days of receiving the decision.

Understanding such decisions can take a toll on the management and can influence their profitability. It is therefore recommended that the business management must avail the services of reputed and expert professionals who will take care of all the financial aspects of the business.

To understand more about this change and how it can affect your business, you can contact the experts at JAXA Chartered Accountants. The experts here will ensure that the business faces no problem in the future and will ensure that the business reached the pinnacle of its success.

AJXA Also provides various other services which can prove helpful for a business. These services include Accounting services, Auditing services, VAT and Tax related services and many others. To know more about the services, feel free to Contact Us. We will be happy to help.