Small businesses in the UAE that are uncertain about corporate tax compliance procedures can benefit from enrolling in the 'Muwafaq' service offered by the Federal Tax Authority. The Muwafaq portal provides comprehensive guidance on the necessary steps for achieving independent compliance. It also facilitates links with tax agents.

Notably, the FTA does not charge any fees for this program. However, if businesses decide to engage a tax agent's services, there may be a discounted service fee. According to industry insiders, many SMEs are still navigating the complexities of corporate tax obligations. While they have established VAT compliance processes over the years, transitioning to corporate tax compliance represents a significant leap forward.

Despite the several months of preparation time provided by UAE authorities (registration for the new tax commenced on June 1, 2023), the take-up rates for the Muwafaq program, launched by the tax authority in March, have significantly risen in recent weeks. This program is tailored specifically for SMEs and comes without any specified time limit. Muwafaq serves as a portal that enables businesses to link with knowledgeable people who can assess their situation and give guidance on the way forward.

Partnering with Tax Agents

A major aspect of this process involves SMEs partnering with tax agents, who can:

• Act on behalf of the business to fulfill their tax responsibilities with the Federal Tax Authority.
• Assist people in meeting all their tax obligations and exercising their associated tax rights.

Opt for 'Approved' Auditors

It is very important for business owners to consistently choose auditors who are officially approved and accredited by the FTA. These accredited tax agents have undergone in-depth training and examinations, showing their knowledge of UAE tax regulations. During the ongoing Gitex Global 2023 event, the FTA is actively promoting the Muwafaq package, which provides many benefits, including a 20% discount when companies engage an accredited tax agent for advisory and registration services. This package also grants access to specialized accounting software programs that have received FTA approval. SMEs now have a designated point of contact to support FTA service-related inquiries and support.

Companies Enrolling

In order to enhance taxpayer compliance, the UAE has categorized tax agents according to specific economic sectors. We can see a substantial uptick in corporate tax registrations with the FTA, largely due to the streamlining of the registration procedure. You can also experience a more simplified process, which makes it easier for companies to comprehend the required documentation and system navigation. Consequently, companies no longer find it necessary to seek external help or endure extended waiting periods.