On 30 September 2022, the UAE issued Federal Decree-Law No. 28 of 2022 on Tax Procedures – the new Tax Procedures Decree-Law (TPL), replacing Federal Decree-Law No. 7 of 2017 on Tax Procedures (as amended by Federal Decree-Law No. 28 of 2021 on Tax Procedures). The new TPL is effective as of 1 March 2023.

The new TPL is the in-force law that governs procedural and administrative rules applying to all federal taxes (e.g., value added tax, corporate tax, etc.) in the UAE.

Some key provisions of the new TPL are:

1. The introduction of certain definitions, e.g., business day, tax residency certificate, tax resident, etc. It amends some of the existing definitions included in the old TPL, e.g., tax law, business, legal representative, tax auditor, etc.
2. Taxpayers are now required to submit a voluntary disclosure to correct a tax return submitted to the Federal Tax Authority (FTA), where an error or omission is subsequently discovered in the tax return, even where such an error or omission does not result in a difference in the tax amount due.

• The FTA shall notify a taxpayer of a tax audit at least ten business days prior to conducting the tax audit (as opposed to five business days under the old TPL).

• The amount of any administrative penalty shall not exceed two times the amount of tax in respect of which the administrative penalties assessment was issued (as opposed to three times with minimum amount of five hundred dirhams under the old TPL).
• In case of a taxation related crime, it updates and sets the following penalties:

1. A prison sentence and a monetary penalty not less than the amount of evaded tax or administrative penalty, and not exceeding three times of it, or either of the two, for deliberately:

1. failing to settle any payable tax;
   1. understating business value for registration purposes;
   1. collecting taxes without being registered;
   1. decreasing the due tax or participating in any form of tax evasion;
   1. committing or omitting any other act which may constitute tax evasion; and
   1. failing to settle a due administrative penalty.

• A prison sentence and a monetary penalty not exceeding one million dirhams, or either of the two, for deliberately:

1. providing false information, data and incorrect documents to the FTA;
   1. concealing or destroying documents, information and data or other material required to be kept and provided to the FTA;
   1. stealing documents or other materials that are in the possession of the FTA or misusing or destroying them; and
   1. preventing or hindering the FTA’s employees’ from performing their duties.