The Federal Decree-Law No. 7 of 2017 on Tax Procedures (Tax Procedures Law) has been amended via the Federal Decree-Law No. 28 of 2021 effective from 1 November 2021.
Below is an overview of the key amendments to the Law in connection with maintaining books of accounts for Tax audit

Keeping Accounting Records and Commercial Books

Any Person conducting any Business shall keep Accounting Records and Commercial Books of his Business and any Tax-related information as determined by the Tax Law and maintain the same according to the controls that will be specified by the Executive Regulation of this Law

Language

• Each Person shall submit the Tax Return, data, information, records and documents related to the Tax and that he is required to submit to the Authority in Arabic as determined by the provisions of the Tax Law.
• The Authority may accept data, information, records, and documents related to Tax in any other language, provided that the Person provides the Authority with a translated copy of any of them into Arabic at his expense and responsibility, if so requested, and in accordance with the Executive Regulation of this Law.

Tax Audits

The right of the Authority to perform a Tax Audit

• The Authority may perform a Tax Audit on any Person to verify the extent of that Person’s compliance with the provisions of this Law and the Tax Law.
• The Authority may perform the Tax Audit at its office or the place of business of the Person subject to the Tax Audit or any other place where such Person conducts Business, stores goods or keeps records.
• If the Authority decides to perform a Tax Audit at the place of Business of the Person subject to the Tax Audit or any other place where such Person conducts his Business, stores goods or keeps records, the Authority shall inform him at least five business days prior to the Tax Audit.
• By way of exception to Clause 3 of this Article, the Tax Auditor has the right of entry to any place where the Person subject to the Tax Audit conducts his Business, stores goods, or keeps records, and as the case may be, it will be temporarily closed in order to perform the Tax Audit for a period not exceeding 72 hours without prior notice in any of the following cases:
• If the Authority has serious grounds to believe that the Person subject to the Tax Audit is participating or involved in Tax Evasion in respect to this Person or another Person;
• If the Authority has serious grounds to believe that not temporarily closing the place where the Tax Audit is conducted will hinder the conduct of the Tax Audit;
• If the Person who has been given advance notice of the Tax Audit under Clause 3 of this Article attempts to hinder the Tax Auditor’s access to the place where the Tax Audit is to be performed. In all cases provided for in Clause 4 of this Article, the Tax Auditor shall obtain the prior written consent of the Director-General; and if the place to be accessed is a place of residence, then a permit from the Public Prosecutor shall also be obtained.
• Places closed under this Article shall be reopened after the lapse of 72 hours, unless the Authority obtains a permit from the Public Prosecutor to extend the closure period for a similar period prior to the expiry of the preceding 72 hours.

A criminal case may be initiated only upon an application from the DirectorGeneral.

The Executive Regulation of this Law shall determine the necessary procedures related to the Tax Audit.

The Right of the Authority to Access the Original Records or Copies Thereof During a Tax Audit

While conducting a Tax Audit, the Tax Auditor may obtain the original records or copies thereof, or take samples of the stock, equipment or other assets from the place at which the Person subject to the Tax Audit conducts his business or which are in his possession, or may seize them in accordance with the rules that shall be specified in the Executive Regulation of this Law.

Timing of the Tax Audit

A Tax Audit will be conducted during the official working hours of the Authority. In cases of necessity, a Tax Audit may be exceptionally conducted outside of these times by a decision of the Director-General.

New Information Surfacing after a Tax Audit

The Authority may audit any issue previously audited if new information that might impact the outcome of the Tax Audit surfaces, provided that the Tax Audit procedures apply in accordance with the provisions of this Law and its Executive Regulation.

Cooperation during the Tax Audit Any Person subject to a Tax Audit, his Tax Agent or Legal Representative shall facilitate and offer assistance to the Tax Auditor to enable him to perform his duties.

The Rights of The Person who is Subject to Tax Audit

The person subject to tax audit shall have the right to:

• Request the Tax Auditors to show their job identification cards.
• Obtain a copy of the Tax Audit Notification.
• Attend the Tax Audit which takes place outside the Authority.
• Obtain copies of any original paper or digital documents seized or obtained by the Authority during the Tax Audit, according to what is specified in the Executive Regulation of this Law

Notification of the Tax Audit Results

• The Authority shall inform the Person subject to Tax Audit of the final results of the Tax Audit within the time limit and according to the procedures specified in the Executive Regulation of this Law.
• The Person subject to the Tax Audit may view or obtain the documents and data on which the Authority based its assessment of Due Tax according to the provisions specified in the Executive Regulation of this Law.

Source: FTA website

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