When GST was implemented in 2017, Hon’ble PM said, “GST is so simple that a class 12 student can help merchants file returns.”. But unfortunately, even after 5 years of implementation, CA’s, CMA’s, Advocates and other Professionals are struggling to compile with it’s provisions. If I talk only about CGST Notifications, There were 75 in 2017, 79 in 2018, 78 in 2019, 95 in 2020, 40 in 2021 and 24 in 2022 till Today. IGST, Rates Notifications, Circulars, Clarifications etc are Separate.
With So many restrictions on ITC, they beat the purpose of GST, i.e. Simplicity. And Same Rule applies to other Taxes like Direct Taxes, Local (Municipal) Taxes and Labour Laws.
When Yesterday The Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law) was issued by the United Arab Emirates (“UAE”), It was shared by So many Accounting and Tax Firms/Professionals on Various Social Media Platforms including Linkedin.
Usually, People analyse Tax Law of other countries only when there is any major change in Tax Laws of their Country e.g. in India it was the time when VAT was introduced, followed by Service Tax and GST.
UAE is like tax heaven for easy and simple tax structure (0% for Individuals, 0% to 9% for Corporates implemented from FY 23-24), But if We analyse their Law Book (Finance Act), there are many points to Learn :
1. It is issued in well advance. Tax Period to start from 01st June 2023. Not just one month before Financial Year.
2. It is fully in layman’s language. No big jargons used.
3. Complete Information. It is like some one new to taxation, step by step description in 20 chapters and 70 Articles from Definitions (A 1), Rates (A 3), General Rules for Determining Taxable Income (A 20), Transfer Pricing (A 34-35), Withholding Tax (A 45-46), Tax Returns (A 53) etc.
4. FAQs also released with Act, if anyone has any doubt can refer FAQ to keep the law totally free from any ambiguity, not like the countries where so many efforts are made just to understand what exactly revenue (dept) expects from the Tax Payers or Citizens including many free/paid seminars/webinars, 100s of detailed explanation videos are uploaded on Youtube in couple of hours after budget is presented, every small or big tax consultancy firm come with their own set of budget manuals.
After this change many things will be new for accounting and tax professionals in UAE, changing from chart of accounts to ERP Customizations and Automations, Complying with TP Provisions, but looking at efforts being made by Govt to clarify all provisions, It won’t be a big challenge.
Link for Corporate Tax Law:
Link for FAQ:
Thanks. Keep Learning, Keep Growing.
