Streamlined Compliance with New UAE Tax Rules for Companies | TAG

In line with the UAE government’s efforts to enhance corporate efficiency and attract investment, the Ministry of Finance has announced significant changes to economic substance reporting requirements. At TAG, we recognize the importance of this update for our clients, who can now benefit from a more streamlined tax process tailored to global market demands.

What Has Changed?

Cabinet Decision No. (98) of 2024 amends the 2020 Cabinet Decision No. (57), which previously outlined certain economic substance reporting requirements for UAE-based companies. Now, companies are no longer required to meet these economic substance requirements for fiscal years ending after December 31, 2022. Key provisions include:

1. Cancellation of fines: Administrative fines imposed under the 2020 decision for fiscal years ending after 31.12.2022 will be canceled.
2. Fine refunds: Previously collected fines will be refunded, and associated penalties and proceedings will be withdrawn.

It’s worth noting that companies are still required to fulfill economic substance obligations for fiscal years from January 1, 2019, to December 31, 2022. This means they may be liable for penalties as determined by the Federal Tax Authority for any instances of non-compliance during those years.

Why Was This Change Made?

This decision aligns with the UAE government’s goal to streamline its tax system, reduce administrative burdens, and boost competitiveness for local businesses. As Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, highlighted: “The amendment aims to enhance efficiency and tax compliance across the country, ensuring the accurate application of tax legislation for all entities subject to it. This step is part of the Ministry’s continuous efforts to improve the tax system and attract more investment.”

At TAG, we believe that these initiatives not only enhance the efficiency and transparency of the UAE’s tax system but also strengthen the trust and security for businesses choosing the UAE as a strategic hub for their operations.

How Can TAG Assist You?

At TAG, we are committed to simplifying tax processes for our clients, optimizing their tax strategies, and ensuring compliance with current regulations. Our team of tax consultants and accounting experts is prepared to:

• Guide companies through changes in economic substance requirements and other relevant tax regulations.
• Advise on efficient tax strategies that enable businesses to capitalize on opportunities within the UAE tax environment.
• Minimize the risk of penalties through careful planning and management of tax obligations.

If you have questions about your tax obligations or need assistance with administrative processes, please visit our dedicated section. At TAG, we’re dedicated to ensuring our clients’ success and peace of mind in the UAE’s market.

Interested in learning more about our tax and compliance services?

Contact us at:

📧 Email: info@tagconsultancy.ae
📞 Phone: +971 (0) 58 518 4291
🌐 Website: www.tagconsultancy.ae