Public Clarification TAX P007: Grace Period to update information in tax records

The Federal Tax Procedure Law in the UAE and its Executive Regulations provide for the necessary administrative compliances required by taxpayers conducting business in the UAE

While the technical aspects covered in the respective Laws are crucial, administrative compliances form a backbone of any tax regime and thus it is important for businesses, to analyse and understand the implications of such updates

Following background is relevant to the updates provided in the Public Clarification:

• The UAE Federal Tax Procedure Law specifies that a taxpayer shall inform the Authority of the occurrence of any event that might require the amendment of information related to his tax records within 20 business days from occurrence of such event
• Effective August 2023, the Executive Regulations on the Tax Procedure Law was updated and it includes additional list of details which a taxpayer is required to update on the portal which are detailed below
• In UAE, the initial point for compliance on any tax matters is the official tax portal called as the “EMARATAX portal” (tax.gov.ae)
• In early 2024, the portal was completed reshaped from its earlier version. The EmaraTax portal required the taxpayers to update all its basic details such as trade license, shareholder details address etc under a common section on the portal referred to as “Taxable Person Detail”
• Further, depending upon the registration status under Excise, VAT and CT, each taxpayer is required to update certain additional data points under the relevant tax profile
• This avoids duplication of records and helps taxpayers to make amendments in a single window to for any changes in Company profile or updating any expired documents
• Once these basic details are updated in the “Taxable Person Detail” section, these are automatically reflected in the relevant Tax registration Numbers (TRNs) of Excise, VAT and CT, as applicable upon approval

While the requirement to amend the tax records within prescribed timelines was always available in the Law, it was often a very neglected area of compliance by the taxpayers.

Following these series of events and the requirement for CT registration, many taxpayers initiated the amendment procedures in the year 2024 which led to penalties on account of delayed amendments.

With the release of this Public Clarification, the Authorities have provided a relief to the taxpayers on account of penalties already levied and also review the records and update it within the grace period provided. It is important to note that the grace period is extended only for updating the profile details and do not apply for cases such as late registration, de-registration, late filing of returns etc. Below are some key aspects of the Public Clarification

It is advised that the taxpayers should review the above and take benefit of the additional period granted by the Authority and complete the compliances before 31 March 2025