FTA Tax Agent UAE

The business community in the UAE benefits from minimal taxation. However, keeping up with the tax reporting needs can still be challenging. Depending on its legal form, activities, and turnover, a business may need to register for Value Added Tax (VAT), Corporate Tax, and sometimes Excise Tax, and file the relevant returns. Certain late filings, registration failures, record-keeping breaches, and other tax-law violations can result in administrative penalties. Sometimes administrative penalties may be reduced, waived, or challenged through the procedures provided under UAE tax legislation. Navigating these complexities may require the representation of a tax expert. In the UAE context, that would be an FTA-approved tax agent.

In this article, we will go over what a tax agent is, what formal representation they can provide, how they differ from consultants and accountants, whether you actually need a tax agent, how to verify a tax agent, and much more.

What Is an FTA Tax Agent?

A tax agent helps you keep up with your tax obligations and exercise your tax rights. A registered Tax Agent is an FTA-recognized professional who can formally act on a person’s behalf in relation to their tax affairs.

To become a tax agent in the UAE, an applicant must meet the FTA’s education and relevant experience requirements, complete any required training and examinations, satisfy good-conduct and licensing conditions, be able to communicate in Arabic or English, and hold or be covered by appropriate professional indemnity insurance.

Because the FTA maintains an online register of tax agents in the UAE, it’s straightforward to verify whether you are choosing an approved tax agent.

What Formal FTA Representation Can a Tax Agent Provide?

Registered Tax Agents can formally provide the following types of representation and support before the FTA:

1. FTA representation
   FTA-approved tax agents can represent businesses before the FTA, which can come in handy in situations where the FTA makes additional information requests or the business needs to dispute or negotiate a tax decision.
2. EmaraTax link
   Tax agents can link their EmaraTax account with their clients’ accounts and handle return filings and various other tax obligations carried out through EmaraTax.
3. Attend and handle FTA audits
   Tax agents can respond to FTA audits on your behalf, providing the necessary documents, information, and clarifications.

A registered tax agent is one recognized route for representation before the FTA, although UAE tax procedures also recognize representation by a legal representative in relevant circumstances. However, you do not need to be a tax agent to perform any of the following activities. You simply need to be a competent accounting firm.

• Bookkeeping
• Preparing tax returns
• Calculating VAT and Corporate Tax obligations
• Registration support for Corporate Tax, VAT and Excise Tax
• Tax advisory

Would you like to understand the Corporate Tax registration process before engaging a tax agent? In a previous article, we cover the registration process, required documents and the relevant deadlines.

Tax Agent vs Tax Consultant vs Accountant

The services of tax agents, consultants and accountants may overlap; however, there are differences in what they can legally do, their registration requirements, abilities and cost.

Does your business have the accounting support it actually needs? Before escalating to a tax agent, you should consider setting up an accounting process for your business. Skrooge can assist you with tax registration, return filing, and monthly financial statements. Take a look at our Accounting & Tax package to see if it meets your requirements.

Do You Actually Need a Tax Agent?

Whether your business needs a tax agent depends on the complexity of your tax needs. If you simply need to register for the relevant taxes and file returns on time, you do not necessarily need a tax agent. Accounting firms or in-house accountants can adequately handle routine VAT and Corporate Tax filing.

However, being represented by a competent tax agent can be valuable when your business is under audit. A tax agent will have a better idea about which records should be kept ready and which portion of the financial statements may require clarifications. This experience can be particularly valuable during an FTA audit.

The same logic applies to businesses that must clear a higher bar for transparency and tax reporting. Multinational companies, Free Zone Persons, tax groups, financial services businesses, and businesses involved in international trade can all benefit from the representation of a tax agent.

When such businesses are audited, they must explain their transfer pricing policies, financial transactions, and prove that their cross-border reporting met the expected standards. Experience matters in such cases. Misworded clarifications or incorrect records being shared can mean additional scrutiny or fines that must either be disputed or paid.

Does your business need financial management support along with accounting support? Fractional CFOs may be able to fulfil those needs. One of our articles discusses the scope of services of fractional CFOs and how they compare to accountants.

How to Verify an FTA-Registered Tax Agent

The Federal Tax Authority (FTA) maintains an online register of tax agents in the UAE. You can go to this website and search for the agent you have chosen as a final verification of identity and experience. The website allows you to filter tax agents by keyword, Emirate, and relevant tax experience. So, you can look for the agent by their name, Tax Agent Approval Number (TAAN), Emirate, tax agency, or area of expertise.

The website also compiles the tax agent’s past experience, which gives you an idea of whether they will be able to adequately support your company’s tax matters. That being said, further enquiries may be required to ensure that the chosen agent is the right fit.

Alternatively, you could begin your search for a tax agent on the FTA website. Simply select your Emirate and the tax procedures or topics most relevant to your business. Then, you can check out the websites of the tax agents that catch your eye or contact them using the provided email IDs and phone numbers.

How to Appoint a Tax Agent in EmaraTax

Here’s how you can appoint a tax agent for your business via EmaraTax.

1. Log in to your EmaraTax account and choose the taxable person profile you wish to access.
2. Click ‘Appoint new Tax Agency/add new user’.
3. Search for the Tax Agency using its registered email ID.
4. Verify the tax agency details that appear on your screen and click ‘Submit request’.
5. Ask the tax agent to accept the appointment request.
6. After the tax agency accepts, its administrator can assign the relevant tax agent to your Taxable Person account and provide the necessary access permissions.

By linking your tax agent to your EmaraTax account, they can access your online dashboard, submit tax returns/documents/clarifications on your behalf, and you will have an online record of how the tax agent has represented you before the FTA.

Before appointing a tax agent, review the written terms of engagement carefully. They should clearly set out the scope of services, responsibilities, fees and other relevant contractual terms.

What to Look for When Choosing Tax Support

You should filter and evaluate tax agents based on the following criteria.

1. Relevant tax experience

A tax agent without relevant experience may face the same learning curve as your internal team. This defeats the purpose of hiring a tax agent.

2. Responsiveness

A good tax agent is someone who can respond to FTA queries promptly and in an appropriate manner. They should know what to say, how to substantiate their statements, and when such justifications are helpful. Clear, well-supported responses usually follow from a deep understanding of the tax landscape and relevant experience.

3. Transparent fees

The engagement letter proposed by the tax agent should clearly demarcate the scope and list the retainer fee and any add-ons or event-triggered fees. This saves you from any surprise fees that throw your cash flow management for a spin.

4. Clarity of scope

The tax agent should resist the urge to offer to take up any and all obligations or duties that you request assistance for. They must clearly state the services they are authorized by the FTA to perform and which of these services can realistically be performed by the agent given their bandwidth.

5. Single source of truth

Ideally, the person maintaining your books and preparing your returns should also be the one who represents you before the FTA. Using the same provider for bookkeeping, tax preparation, and FTA representation can reduce the risk of inconsistencies between your accounting records and tax filings.

Conclusion

Being represented by a tax agent can be valuable when you are under audit or if your business attracts a lot of attention from tax authorities and regulators. Tax compliance can be especially complicated for Free Zone Persons, tax groups, businesses involved in international trade, and businesses dealing in heavily regulated goods and services.

However, most UAE businesses may not need a tax agent. Their obligations will typically be limited to tax registration and filing returns. In such cases, an accountant will provide enough coverage. However, for some businesses, hiring an in-house accountant is not feasible because the workload may not justify the salary required to retain an accountant.

For such businesses, accounting firms like Skrooge are the ideal fit. For a monthly subscription, you can access monthly financial statements, VAT and Corporate Tax filing, tax advisory, a Zoho Books account, and other accounting services. Consider taking a look at our Accounting & Tax package and see if it meets your requirements.

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