ABU DHABI/ WAM
The Federal Tax Authority (FTA) has launched the second phase of its comprehensive campaign to raise business sectors’ awareness of corporate tax and provide continuous knowledge support to taxpayers.
The campaign aims to ensure a seamless implementation of the Corporate Tax Law which entered into effect in June and applies to financial years that began on or after 1st June 2023.
In a press release the FTA explained that the new phase of the campaign – which runs until the end of this year – will feature a number of events and virtual as well as in-person workshops across the UAE’s seven emirates. The programme will focus on raising awareness about various specific topics such as legislation and the requirements and procedures for Corporate Tax compliance and will be tailored to the needs of each of the concerned taxpayer. In addition, the latest technologies will be utilised to ensure easy access to information for taxable persons, and to support and encourage the business community to implement Corporate Tax Law efficiently and accurately.
Khalid Ali Al Bustani, FTA Director-General, inaugurated the first workshop in the second phase of the awareness campaign which was held in Abu Dhabi. The workshop was specially designed for the small and medium-sized enterprises (SMEs) sector and focused on “Small Business Obligations and Relief Under the Corporate Tax Law.”
The event was attended by a number of officials from the Abu Dhabi Department of Finance, the Abu Dhabi Department of Economic Development, Khalifa Fund for Enterprise Development, the Emirates Entrepreneurship Association and the Abu Dhabi Chamber of Commerce and Industry, as well as representatives of the FTA’s key stakeholders in the emirate. The workshop has seen a significant turnout and lots of interaction from over 265 SMEs in attendance.
Al Bustani confirmed that the launch of the second phase of the awareness campaign is part of the integrated strategy adopted by the FTA to ensure seamless and precise compliance with the UAE Corporate Tax, which is considered among the most competitive in the world as it levies a basic rate of 9 percent, and a 0 percent rate on taxable profits up to AED 375,000 to support and encourage startups and small businesses.
In his opening speech, Al Bustani said, “The FTA is committed to supporting taxpayers in fulfilling their tax obligations. The FTA seeks to encourage voluntary self-compliance among taxpayers by creating a clear procedural and legislative framework that follows global best practices. Corporate Tax registration is now available through the EmaraTax platform for digital tax services, with transactions and procedures that are clear, simple, and fast.”
He added, “The opening of corporate tax registration coincided with various awareness activities that include the release of various guides, programs, and explanatory videos that are available on the FTA website. These provide an in-depth view of the legislative and regulatory aspects concerning the criteria for determining taxpayers subject to Corporate Tax and the corresponding compliance mechanisms. The aim is to enable taxpayers to know their rights and duties, tax calculation mechanisms, executive procedures, and legal obligations associated with Corporate Tax.”
Al Bustani emphasised that the FTA’s comprehensive awareness campaign, which was launched last year to introduce the Corporate Tax, had yielded positive results. The campaign improved the direct connection and engagement between the FTA and the taxpayers. It had an impressive turnout and response from the corporate sectors
He said that the second phase of the campaign would yield better outcomes by providing continuous knowledge support to all relevant taxpayers and stakeholders. Workshops will be held for stakeholders working within SMEs, which account for the majority of the country’s economic sector. Due to its strategic significance, the FTA treats this sector as a priority, by allocating many induction sessions for SMEs, in addition to continuous communication with other sectors.
Al Bustani added, “These measures to promote awareness complement the FTA’s efforts to support this vital sector. Accordingly, the FTA launched the Muwafaq Package initiative to ensure ease of doing business and tax compliance in the SMEs sector, offering them a set of customised services, incentives, and privileges. This is part of our transformational projects that focus on building the world’s best and most dynamic economy, with the Muwafaq Package offering innovative tax solutions for SMEs to facilitate tax compliance, as well as educational materials about tax procedures suitable for SMEs sector to empower this sector to be a driving force for the national economy, and promote entrepreneurship and innovation.”
During the workshop, the obligations and facilities granted to small businesses under the Corporate Tax Law were highlighted, and the FTA’s representatives provided a comprehensive explanation of the Corporate Tax Law and related decisions, the legal requirements for compliance, and the criteria to determine taxable persons and taxable income, clarifying the applicable tax rates and tax periods. Moreover, the FTA experts outlined the relief offered to small businesses and how to apply the provisions of the Corporate Tax law for those eligible for Small Business Relief.
The FTA representatives confirmed that the relief is intended to support start-ups and other small or micro businesses by reducing the burden and cost of Corporate Tax compliance. They explained the revenue threshold and conditions for a taxable person to elect for Small Business Relief and clarified the provisions of the carried forward Tax Losses and disallowed Net Interest Expenditure under the Small Business Relief scheme. The FTA representatives also answered queries of participants to ensure seamless and accurate Corporate Tax compliance.