Keeping your tax records up to date with the Federal Tax Authority (FTA) is a legal requirement in the UAE. Here’s what you need to know to avoid AED 10,000 late amendment penalties and ensure compliance.

Brief

• Notification Requirement: Fore changes in your tax records with the FTA, submit an amendment application within 20 days.
• Penalties for Non-Compliance: AED 5,000 for the first failure, AED 10,000 for subsequent failures.
• Information to Update: Business address, activities, partners, and other records with the FTA.

Detailed Insight

Late Amendment Penalties

The FTA has stringent penalties for failing to update your records on time:

• Initial Penalty: AED 5,000 for the first failure to notify the FTA within the 20-day period.
• Subsequent Penalty: AED 10,000 for any subsequent failures.

How to Notify the FTA?

UAE Tax-registered individuals and businesses must:

1. Log in to Emaratax Portal: Use your account to file amendment application.
2. Submit Amended Information: Include all necessary documents and details of the changes.
3. Deadline: Submit the application within 20 business days from the date of the change.
4. FTA Review: The FTA will review and either approve the application or request additional information.

Types of Changes to Notify

• Legal Name: Any changes to the Registrant’s name.
• Address: Updates to physical or mailing addresses.
• Email Address: Changes to the contact email with the Authority.
• Trade License: Renewal or amendments, including activities, address, managers, owners, and contact details.
• Legal Entity Type: Changes in entity type (e.g., sole proprietorship to LLC).
• Partnership Agreements and Articles of Association:
  • Unincorporated partnerships: Changes in partnership agreements.
  • Incorporated entities: Updates to articles of association, including business names, managers, partners, and ownership.
• Nature of Business: Modifications to business operations.
• Business Address: Changes to the business operating address, or adding branches.

Practical Steps for Compliance

• Monitor Records: Regularly check the validity and expiry of your tax records, including: license, partners IDs & passports, rent contract.
  • Amend the license for any changes such as address update even before the license expire and notify the FTA for the change within 20 business days.
  • If you’re on a Flexi-desk in a free zone, request the rent agreement from the free zone authority, and update the FTA for any changes.
• Communicate with Your Tax Agent: Ensure your tax agent or legal representative is aware of any changes or renewals on a timely basis.
• Timely Submission: Ensure amendment applications are submitted within 20 business days of any changes, and keep a copy of the acknowledgement and references of the application.

Laws References

• Federal Decree-Law No. 28 of 2022: Tax Procedures Law.
• Cabinet Decision No. 74 of 2023: Executive regulations on tax procedures.
• Cabinet Decision No. 49 of 2021: Penalties.