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Tax Agent as per UAE Federal Law

Who Are Tax Agents? How They Can Help You In Implementing the VAT System

[vc_row][vc_column][vc_column_text]The landmark Federal Law Number 7 of 2017 was issued last 11th of June this year by the President His Highness Sheikh Khalifa bin Zayed Al Nahyan regarding the value-added tax (VAT) procedures in the United Arab Emirates (UAE). The foundations were laid in the tax system, and the Federal Tax Authority’s function in this new regime was also expounded.
With the impending VAT implementation in the UAE, there are a lot of things that should be learned by people that can definitely help them in making it easier to deal with the tax system. Aside from VAT procedures and registration in the UAE, a businessman should also be aware of what a Tax Agent is. Among the regulations and procedures stated in the Law, the role of the Tax Agents is also established, providing specific requirements regarding Tax Agents.

Identifying a Tax Agent

Article 1, Chapter 1 of the aforementioned law has the definitions and scope of applications of the law. Among the definitions, “Tax Agent” is explained as “any Person registered with the Authority in the Register, who is appointed on behalf of another Person to represent him before the Authority and assist him in the fulfillment of his Tax obligations and the exercise of his associated tax rights states that a Tax Agent.”
Basically, Tax Agents are people who can represent taxpayers, interacting with the Federal Tax Authority (FTA) directly.

Meaning of “Register of Tax Agents”

Federal Tax Authority shall have a Register of Tax Agents that has all the information about the agents, wherein important matters regarding them are filed based on Article 12, Part 2, Chapter 3 of the same Law.

Registered Agents

The preparation for the upcoming VAT in the UAE is on the rise and many are in need of help but not everyone can pose as a Tax Agent. In light of this, according to Article 13, Part 2, Chapter 3 of this Law, the person needs to be in the Register and be licensed by the Ministry of Economy and the competent local authority for the profession. Therefore, it is important to conduct checks and inspections as some could be scammers that would put people at risk.

How to be a Legitimate Tax Agent?

There are a couple of conditions to be fulfilled before being a Tax Agent as per Article 14, Part 2, Chapter 3 of the Law.

  • The following below should be met by the people that are planning to be Tax Agents:
    • It is important for a Tax Agent to have good conduct and behavior and never have been convicted of a crime or misdemeanor prejudicial to honor or honesty, notwithstanding that he may have been rehabilitated.
    • It is also important for a Tax Agent to hold an accredited qualification from a recognized university or institute showing his specialization and practical experience as specified in the Executive Regulations of this Law.
    • In addition, it is essential for a Tax Agent to be medically fit to perform the duties of the profession.
    • And it is important for a Tax Agent to hold professional indemnity insurance.
  • When a Tax Agent has ceased in practicing his profession as a Tax Agent due to some hindrances, the FTA must be notified of the period when he stops doing so. A request may be submitted to the FTA to resume practicing as a Tax Agent when the aforementioned hindrances have concluded.
  • Procedures for listing a Tax Agent in the Register and the rights and obligations of the Tax Agent before the Authority and the Person shall be specified in the Executive Regulations of this Law.

Appointing a Tax Agent

In accordance with Article 15, Part 2, Chapter 2 of this Law, a Tax Agent may be appointed by someone to represent him directly to the FTA on his behalf, handling his tax affairs without harming the person’s responsibility to the FTA.
The FTA is not authorized to deal with a Tax Agent when the former is informed by the person whom the latter is representing that the contract has ended between the person and the Tax Agent’s agency or if the Tax Agent has been dismissed.

Your Records with the Tax Agent

The Tax Agent will store the person’s information, and as per Article 16, Part 2, Chapter 3 of this Law, when it is requested by the FTA, the Tax Agent must give all the information, documents, records, and data required for the said person.

The FTA also has the right to use the documents or records of a person that is with the Tax Agent for tax audit purposes, even if the Tax Agent has been dismissed or their contract has expired.

Since the Tax Agents do all the tasks for the person or business, it will be easier for them. Hence, if you are searching for VAT consultants in Dubai or any city in UAE, we, FAR – Farhat Office & Co. can conduct a consultation with you and act as your Tax Agent, handling all your tax affairs and representing you directly to the FTA. You can contact us and book a consultation here.

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions. Read more