Key Features

• Taxable income calculation must follow the Corporate Tax Law, except when specific rules authorized by the Director General of the Department of Finance apply to areas such as joint revenues, joint expenses, headquarter and regional expenses, administration expenses, and unrealized losses and gains from taxable income.
• The Foreign Bank must submit its tax returns, audited financial statements, tax payable amount, supporting documents, and Federal corporate tax paid within the deadline specified by the Director-General.
• The Law introduces a voluntary disclosure mechanism for Foreign Banks, enabling them to correct tax return errors within 30 days of discovering inaccuracies in their submitted tax returns, particularly when the tax payable was under or overestimated.
• The Law specifies detailed provisions regarding tax audit and appeal procedures for Foreign Banks, outlining the tax audit process, the rights of the bank, and objection procedures against tax assessments or penalties.
• Penalties under the Law for Foreign Banks include:

(a) Administrative violation fines capped at AED 500,000, potentially doubled for repeat offenses within two years.

(b) Late payments incurring a fine of 2% of the unpaid tax or fine value per month of delay.

(c) Tax evasion penalties entail fines twice the amount of tax evaded, in addition to any severer penalties stipulated in other laws.