The implementation of an advanced tax system requires qualified human competencies capable of navigating the tax requirements imposed on the public by the tax legislation. Therefore, in 2018 the Federal Tax Authority (“FTA”) has developed and published a Guide on the Professional Standards for Tax Agents (the “Guide”) which takes into account the necessary qualifications, skills, ethical conduct, and competencies that Tax Agents must display in order to effectively and responsibly assist the public and business sector in respect of their tax requirements.
Code of Ethics
The Guide contains guidance in respect of the professional standards and code of ethics expected to be adhered to by Tax Agents as well as the roles and responsibilities prescribed by the tax legislation. It also confirms the authority to be exercised by the FTA when appointing, monitoring the standards for Tax Agents, and deregistration of Tax Agents.
The code of ethics has been developed by the FTA based on globally accepted standards expected from the tax profession in general and is based on the five basic principles of integrity, objectivity, competence, professionalism, and confidentiality.
Who is a Tax Agent?
Article 1 of the Federal Law No. 7 of 2017 on Tax Procedures (the “Tax Procedure Law”) defines a Tax Agent as any Person registered with the FTA, authorized by another person to represent him before the FTA and assist with the exercise and fulfillment of his tax rights and obligations.
As per Article 12 of the Tax Procedure Law, the FTA will keep a register of Tax Agents. Only those Tax Agents who are duly licensed and listed in the register will legally be permitted to represent a Taxable Person in the UAE.
Article 13 of the Tax Procedure Law clearly states that a Tax Agent may only practice as such if he is registered with the FTA and licensed with the Ministry of Economy.
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Requirements for Registration as a Tax Agent
Article 14 (1) of the Tax Procedures Law specifies the conditions that must be met by an applicant to register as a Tax Agent with the FTA:
- Must be of good standing and never have been convicted of a crime or misdemeanor prejudicial to honesty, notwithstanding the fact that he may have been rehabilitated.
- Must hold an accredited qualification from a recognized university or institute showing his specialization, skills, and practical qualifications.
- Must be medically fit to perform his duties.
- Must hold professional indemnity cover with a reputable and recognized insurer.
The following additional requirements are noted on the FTA’s website:
- The Tax Agent must have at least 3 years’ relevant experience as either a tax professional, a lawyer, or an accountant;
- The Tax Agent must have the ability to communicate, both verbally and in writing, in Arabic and English.
- The Tax Agent must have passed any additional tests prescribed by the FTA to meet qualification standards.
Article 14(2) of the Tax Procedures Law states that the Tax Agent is obliged to notify the FTA of any changes or impediments which may impact his ability to practice as a Tax Agent.
Appointment of a Tax Agent
Article 15 (1) of the Tax Procedure Law states that a person may authorize a Tax Agent to act as his representative without negating such person’s responsibility before the FTA.
Article 15 (2) of the Tax Procedure Law provides further that if such person informs the FTA that his agency engagement with the Tax Agent has come to an end, the FTA may no longer have any communications with the Tax Agent in respect of that person.
Duties of the Tax Agent
Within the framework of exercising his powers as a tax agent, there are certain professional standards to which the FTA expects a Tax Agent to adhere. These professional standards will be monitored by the FTA, and will be used as a means of assessing the tax agent’s compliance with his responsibilities and performance of his duties.
Once authorized as a person’s representative, that Tax Agent must:
- Assist the person in carrying out his tax obligations according to the contractual agreement between them.
- Without prejudice to any other obligations created in the existing legislation, the Tax Agent is obliged to keep confidential any information obtained in the course of performing his duties and duties.
- Refuse to participate in any action or plan that may lead to the violation of any law by any person or that may negatively affect the integrity of the tax system or lead to the loss of revenue payable to the FTA.
- Must renew their registration with the FTA before expiry.
Responsibility of a Tax Agent during a Tax Audit
Article 16 (1) of the Tax Procedures Law provides that the FTA may require the Tax Agent to make available any information, documentation, records, and data in relation to any taxable person represented by the Tax Agent.
In accordance with Article 16(2), the FTA has the further right to view the records of any person in the possession of or available to that person’s Tax Agent and may rely on the said agent for assistance during a tax audit.
This duty of assistance will endure regardless of the termination of the agency engagement, be it by the expiry of the agreement or the dismissal of the Tax Agent.
Registration as a Tax Agent
The registration of a Tax Agent can be completed via the online e-services portal on the FTA’s website – https://eservices.tax.gov.ae.
The FTA may request additional information or documentation from the applicant, and it may also conduct a personal interview or inquire about the documents and references mentioned in the application.
The FTA considers the application and issues a preliminary decision within a period not exceeding 15 working days from the date of receipt of the application.
In the event that the FTA requests additional information from the applicant, it will provide the applicant with a deadline within which the information must be provided. The FTA is then obliged to issue a decision regarding the application within 15 working days from receipt of the said further information.
Once the application has been preliminarily approved by the FTA, the applicant must pay the prescribed registration fee. After payment of the relevant fees, the Tax Agent will be registered within five working days from the date of approval, or any other date prescribed by the FTA.
The Tax Agent will be provided with a registration certificate reflecting the Tax Agent Approval Number (TAAN). The registration is valid for a period of 3 years and maybe renewed upon expiry of the 3-year period.
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Rejection of Registration Application
The Authority may reject a person’s application to be registered in the Register in any of the following two cases:
- If the Tax Agent does not fulfill the qualification requirements as prescribed by the FTA and the legislation.
- If the tax agent’s registration may adversely affect the integrity of the tax system in the country.
Removal of Tax Agent from the Registry
The Authority may delete the Tax Agent’s registration from the registry in any of the following cases:
- If it is proven that the person is not qualified to be a Tax Agent or no longer fulfills the conditions for registration as a tax agent
- If it becomes evident to the Authority that the continuity of his registration in the registry would negatively affect the integrity of the tax system
- If he commits any serious violation of the provisions of the tax legislation or any other law.