Federal Tax Authority (FTA) in UAE: Role, Functions, Services and Penalties

The Federal Tax Authority (FTA) of the UAE oversees the administration and enforcement of federal taxes to support economic diversification and reduce reliance on oil revenues. Key initiatives include managing value-added tax (VAT), corporate tax, and excise taxes on specific goods, ensuring businesses comply with tax policies, and guiding them on their responsibilities.

The Federal Tax Authority (FTA) is at the forefront of this system, regulating and managing taxes and enforcing tax policies nationwide. This blog explores the key functions, services, and taxes administered by the FTA, helping businesses and individuals understand its importance and compliance requirements.

Quick Navigation

1. Login Page – Access your FTA account for tax-related activities.
2. E-Services Portal – Manage tax registration, filing, and other services.
3. Contact Us – Reach out to the FTA for inquiries and support.
4. Services Overview – Explore available FTA services.
5. Service Cards Guide (PDF) – A detailed guide on FTA services.

Brief Overview of the Federal Tax Authority (FTA)

The Federal Tax Authority is a governmental body established to oversee tax regulations in the UAE. It is in charge of overseeing, collecting, and enforcing taxes nationwide. The FTA promotes economic expansion in the United Arab Emirates while maintaining effective and open compliance with tax laws.  

Role in the UAE's Tax System

The Federal Tax Authority’s role is crucial as the UAE has diversified its economy beyond oil. Introducing new tax frameworks helps maintain financial stability. Its contributions can be categorized as follows:

1. Economic Diversification

The UAE focuses on reducing its dependence on oil revenues through effective financial strategies. This approach aligns with the country’s long-term vision of building a strong, diverse economy that can withstand global challenges. Encouraging various economic activities helps the UAE have a more resilient and balanced future.

2. Revenue Generation

Structured taxation policies, enabled by the tax system, are helping the UAE generate income from sources other than oil. These measures ensure that the government has a stable flow of funds to support national projects and initiatives.

3. Sustainability Goals

To prepare for a future where oil might not be the primary source of income, the UAE is working on creating new ways to generate revenue. This proactive approach secures the nation’s economy and makes it more adaptable to global changes and uncertainties.

4. Compliance and Education

The UAE focuses on the importance of helping businesses and individuals understand their tax obligations. Through clear guidance and educational efforts, the government ensures that tax collection is fair and transparent, leading to trust and compliance among all stakeholders.

Major Taxes Administered by the FTA

The FTA is responsible for managing several key taxes in the UAE. These include:

1. Value Added Tax (VAT)

Introduced in 2018, VAT is a significant tax administered by the FTA. The standard VAT rate is 5%, applied to most goods and services. VAT helps generate consistent government revenue while being relatively simple to manage and collect for businesses.

2. Excise Tax

Excise taxes are also governed by the FTA. It is applicable to certain products that are bad for the environment or human health. This covers products including energy drinks, sugary drinks, and tobacco. Depending on the products, excise tax rates range from 50% to 100%.

3. Corporate Tax

The UAE introduced a corporate tax in June 2023. The standard corporate tax rate is 9%. It applies to businesses based in the country. This move of the government is aimed to diversify its revenue sources and ensure sustainable economic growth.

FTA Services and Functions

The Federal Tax Authority provides various services to ensure the smooth operation of the tax system in the UAE. These services come under customer service, registration, and refunds for individuals, business sector, government sector, and semi government sector. Here's the complete list of services offered by FTA:

Tax Registration Services

1. VAT Registration
2. Excise Tax Registration
3. Corporate Tax Registration
4. Tax Group Registration
5. Tax Agency Registration
6. Tax Agent Registration
7. Warehouse Keeper Registration
8. Registration of Customs Clearing Companies
9. Registration of Designated Zones for Excise Tax

Tax Deregistration Services

1. VAT Deregistration
2. Excise Tax Deregistration
3. Corporate Tax Deregistration
4. Deregistration of Tax Groups
5. Deregistration of Excise Tax Designated Zones
6. Clearance Companies Deregistration

Tax Refund Services

1. Refund of Excess Amounts to Registrants
2. VAT Refund for Foreign Business Visitors
3. Refund for Tourists
4. Tax Refund for UAE Nationals Building New Residences
5. Tax Refund for Mosque Construction and Operation
6. VAT and Excise Tax Refunds for Missions, Diplomatic Bodies, and International Organizations

Amendment Services

1. Change in Input Tax Apportionment Method Request
2. Tax Group Registration Amendment
3. Amendment of Tax Agent Records
4. Amendment of Warehouse Keeper Records
5. Amendment of Excise Goods Record
6. Amendment of Clearance Company Financial Guarantee
7. Tax Records Amendment

Clarifications and Support

1. Inquiry Request
2. Tax Clarifications Request
3. Submit Complaints
4. Submit Suggestions
5. Complaint Against Tax Agents

Administrative and Penalty Services

1. Administrative Penalty Waiver or Installment Plan Request
2. Administrative Exception Request
3. Reconsideration Request

Special Licenses and Certificates

1. Digital Tar Stamps Request
2. Retailer Registration in the Tourist Refund Scheme
3. Exhibitions and Conferences Services Supplier Licensing
4. Issuance of Tax Certificates (Tax Residency and Commercial Activity)

Miscellaneous Services

1. Declaration of Lost and Damaged Goods Request
2. Accounting Software Accreditation Request
3. Renewal of Excise Tax Designated Zone Registration
4. Excise Goods Registration 

FTA Penalties on Non Compliance

The FTA enforces strict measures to ensure businesses meet their tax obligations. Non-compliance can lead to significant penalties. 

FTA Customer Care

To contact FTA, you can use the following methods:

Conclusion

Through efficient tax administration and management, the Federal Tax Authority supports the UAE's economic framework. It is responsible for important taxes like corporation tax, excise tax, and VAT. In this manner, the FTA ensures equity and transparency while contributing to the nation's revenue generation. 

The extensive services offered by the authority assist companies in adhering to tax laws. Furthermore, the need for upholding compliance is highlighted by its steadfast stance on penalties.