The Federal Tax Authority issued Decision No. 14 of 2023 on 16 August 2023, which provides a comprehensive insight into the additional conditions required for the registration of juridical persons as tax agents. A tax agent is an individual who is authorized by the FTA to represent a taxpayer before the FTA and to assist them in fulfilling their tax obligations. A tax agent can provide various tax-related services to the taxpayer, such as preparing and filing tax returns, applying for tax refunds, requesting tax clarifications, and resolving corporate tax disputes. A tax agent can also act as a liaison between the taxpayer and the FTA, and communicate on their behalf. A juridical person has a separate legal entity from its members/owners for instance an association, a company, or a partnership. A juridical person can register as a tax agent and provide tax-related services to its clients through its natural person tax agents, who are the individuals employed or contracted by the juridical person to perform the tax agent functions.

Conditions for Juridical Person for Registration as Tax Agent:

The conditions laid out in the Decision ensure that only qualified and competent entities gain this esteemed designation. The decision also aims to enhance the standards and professionalism of the tax agents in the UAE, and to safeguard the interests and rights of the taxpayers. Furthermore, maintaining a designated ratio of natural person tax agents to employees is imperative.

General Conditions for Tax Agent Registration

General prerequisites applicable to all aspiring tax consultant in UAE, whether they are natural persons or juridical persons. These conditions cover various aspects, such as:

• UAE citizenship or residency: 

A tax agent must be a citizen or a resident of the UAE, as per the applicable laws and regulations. This condition ensures that the tax agent is familiar with the local culture, laws, and practices, and can easily access the FTA’s offices and online portal.

• Relevant academic qualifications or professional experience in accounting and taxation: 

A tax agent must have a certified degree in tax, accounting, or law from a recognized educational institution, or an equivalent qualification or experience in these fields. This condition ensures that the tax agent has the necessary knowledge and skills to provide tax-related services to the taxpayer.

• Professional indemnity insurance from an approved insurer:

A tax agent must possess or be covered by professional indemnity insurance that is suitable for the nature and size of their tax-related business. This condition ensures that the tax agent is financially responsible and can compensate the taxpayer for any losses or damages caused by their negligence, error, or omission.

• A minimum of three years’ experience as a tax professional, lawyer, or accountant: 

A tax agent must have at least three years of practical experience in the field of taxation, law, or accounting, either in the UAE or abroad. This condition ensures that the tax agent has the necessary expertise and exposure to handle various tax-related issues and scenarios.

• Successful completion of additional tests prescribed by the FTA: 

A tax agent must pass any additional tests or examinations that the FTA may prescribe from time to time, to assess their knowledge and competence in the field of taxation. This condition ensures that the tax agent is updated and aware of the latest developments and changes in the tax system.

• Good conduct, without any criminal convictions: 

A tax agent must exhibit a record of good conduct and behavior, and must not have any previous convictions for crimes or misdemeanors related to honor or honesty, unless rehabilitated. This condition ensures that the tax agent is trustworthy and ethical, and can uphold the reputation and integrity of the tax profession.

Additional Conditions for Juridical Person Registration

In addition to the general conditions mentioned above, Decision No. 14 of 2023 introduces specific conditions for juridical persons who wish to register as tax agents in the UAE. These conditions include:

• Having one of the partners or directors listed in the FTA’s tax agents register: 

A juridical person must have at least one of its partners or directors registered as a tax agent with the FTA, and must authorize them to represent the juridical person before the FTA. This condition ensures that the juridical person has a natural person who is qualified and accountable for the tax agent functions.

• Maintaining a designated ratio of natural person tax agents to employees: 

A juridical person must maintain a minimum ratio of natural person tax agents to employees, as determined by the FTA. The natural person tax agents must be employed or contracted by the juridical person, and must meet the general conditions for tax agent registration. This condition ensures that the juridical person has sufficient and competent human resources to provide tax-related services to its clients.

• Operating as licensed audit, tax, or law firms: 

A juridical person must operate as a licensed audit, tax, or law firm, as per the applicable laws and regulations in the UAE. The license must be issued by the competent authority in the relevant emirate or free zone. This condition ensures that the juridical person has the necessary legal status and authorization to provide tax-related services in the UAE, and that it follows the professional standards and codes of conduct of its respective field.

• Effect of Non-Compliance: 

Failure to comply with these conditions may result in the rejection of the application or the cancellation of the registration by the FTA.

Benefits of Registering as a Tax Agent in UAE

Registering as a tax agent in the UAE offers several benefits for both the tax agent and the taxpayer. Some of these benefits are:

• Enhanced credibility and reputation in the market as a qualified and competent tax professional.
• Access to the FTA’s online portal and resources, which facilitate the submission of tax returns and other documents on behalf of the taxpayer.
• Protection from legal liabilities and risks arising from tax-related errors or omissions, as the tax agent is covered by professional indemnity insurance.
• Ability to represent the taxpayer in case of any disputes or inquiries with the FTA, and to negotiate on their behalf.

The Decision is a significant step taken by the FTA to regulate and standardize the registration process of tax agents in the UAE. By imposing strict conditions and criteria for both individuals and juridical persons, the FTA aims to ensure the quality and professionalism of the tax agents who represent the taxpayers before the FTA. Registering as a tax agent in UAE can provide numerous benefits for both the tax agent and the taxpayer, as well as contribute to the development and efficiency of the tax system in the State.

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