FTA Decisions on Corporate Tax
FTA Decision No. 11 of 2023: Declaration by Exempt Persons
Exempt Persons under paragraphs (e) to (i) of Clause 1 of Article 4 of Corporate Tax Law shall submit an Annual Declaration of continuity of fulfilling the relevant exemption conditions as per the Corporate Tax Law and that their records with the FTA are still valid. Declaration to be submitted within 9 months from the end of the relevant Tax Period.
FTA Decision No. 12 of 2023: Conditions of forming Tax Group by Subsidiaries of Government Entity
As per Clause 2 of Article 40 of Corporate Tax Law, Subsidiaries in which a Government Entity directly or indirectly owns at least 95% ownership interest as mentioned in paragraphs (b) to (d) of Clause 1 of Article 40, can form a Tax Group, subject to the following conditions:
1. Conditions as per para (b) to (d) of Clause 1 of Article 40 to be satisfied
2. Exempt entity (as per para (a) of Clause 1 of Article 4) should not be a member of the group
3. A Subsidiary of a Government Entity is not a member of the Tax Group where such Subsidiary is an exempt person.
4. Group appoints one of the Subsidiaries as representative of the Tax Group.
Representative Subsidiary to submit application to form the Tax Group.
FTA Decision No. 13 of 2023: Conditions of Conversion of Currency used other than AED (UAE Dirham)
As per Article 43 of the Corporate Tax Law, Taxable Person (using other currency for accounting purposes than the UAE Dirham) shall convert the Corporate Tax Payable and Tax returns in AED as per per the conditions specified therein.
1. Conversion should be in below order:
a. If practically possible, for each transaction use Spot Rate as published by the Central Bank of The UAE on the date of transaction.
b. If not practical to use the Spot Rate, average monthly exchange rate of the Central Bank of UAE shall be used, provided it should result into an acceptable approximate estimation of the Tax Payable based on the number and timing of transactions within the Financial Year.
c. If it is not practical to use the exchange rates as mentioned in para (a) and (b) above, the average annual exchange rate of the Central Bank of UAE shall be used.
2. Taxable Person should continue use the same method throughout the Tax Period.
3. Records documenting the reason of selection of a method for currency conversion, rates used, rationale, and mechanisms applied to all currency conversion accounts to be maintained.
4. In case of change in conversion method in a Tax Period, records documenting relevant reason and rationale to be maintained.
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