United Arab Emirates revise tax litigation procedures (recontent, reimbursement of penalties, fewer payments, longer deadlines)

Since November 1, 2021, tax litigation procedures have been modified in accordance with Federal Legislative Decree No. 28/2021 creating a new possibility of recontenting disputes, allowing payments by installments or bank guarantees, offering longer deadlines for opposition actions, reduction in payments required to proceed with tax litigation, and other notable changes.


  • Article 33 (2) (c) of the new amendments states:

“Failure of the person to justify payment of at least 50% of the amount of the administrative penalties decided by the Committee, or according to the court decision, depending on the case…”

  • The text of this article illustrates an unprecedented circumstance where the court can issue a judgment ordering a person to pay certain penalties, but subsequently the person pleads these penalties again in court. Essentially, creating a new opportunity to challenge penalties that have already been decided.
  • It has generally happened that tax disputes have been brought to court by challenging a decision of the federal tax administration only, after fulfilling the conditions for filing a request for review and objection with the Tax Dispute Resolution Committee. competent.
  • The new text creates a new dynamic allowing the Federal Courts to possibly consider new litigation for cases that have already been concluded.
  • This also goes hand in hand with the new amendments to the Law on Civil Procedures (the overall legislation of the Law on Tax Procedures) which – from 2 September 2021 – allow for the renewal of final and binding judgments in certain circumstances such as procedural errors or judgments based on a repealed law, where the application of the correct law would alter the opinion acquired in the case.

Refunds of penalties and installments

  • A new committee must be formed, responsible for deciding on exemptions from penalties, authorization to pay penalties in installments and refunds of penalties.
  • The new amendments require that bylaws be published to manage the procedures to be conducted by the committee.
  • One question to consider is whether the refund mechanisms will apply to penalty refunds granted directly by the AFC, or also to court-ordered refunds.


  • The time limit for submitting a request for reconsideration against an AFC decision has been increased to 40 working days instead of 20 working days previously.
  • The deadline for the AFC to rule on a review request has also been increased from 20 working days to 40 working days.
  • Objections against FTA reconsideration decisions to be filed with a Tax Dispute Resolution Committee must be filed within forty working days from the date of notification of the reconsideration decision. This is also an increase from the previous limit of twenty days of the week.
  • Once a tax dispute resolution committee has made its decision, the person can challenge that decision in the Federal Court of First Instance. The new changes have increased the time limit for filing the appeal with the Federal Court of First Instance to 40 weekdays as well, as opposed to the earlier requirement of 20 weekdays.

Pay now, argue later (tax dispute resolution committees)

  • Objections before a tax dispute resolution committee previously required the resolution of all taxes and penalties subject to objection before being filed with the committee. Otherwise, the objection would be dismissed on a procedural basis.
  • The new changes only require payment of the taxes that are the subject of the objection. The amendments are silent on any obligation to pay penalties. Implicitly, this should mean that the payment of penalties is no longer necessary for a tax dispute resolution committee to rule on an objection.

Pay now, argue later (Federal Court of First Instance)

  • Once a tax dispute resolution committee has made its decision, the person can appeal that decision to the Federal Court of First Instance.
  • The new amendments require payment of at least 50% of the penalties in dispute to be brought before the Federal Court of First Instance (or subsequent appeals and the Supreme Court) can deal with the dispute.
  • However, the new changes allow payment in cash to the AFC or by an approved bank guarantee in favor of the AFC.

Government-to-government conflicts

  • The new amendments exclude state taxpayers (federal or specific emirate) from the application of the texts governing the competence of the tax dispute resolution commission, the procedure for filing objections, the commission’s procedures, enforcement of the commission’s decision and appeals to the courts.
  • However, the new amendments require a decision by the Cabinet of Ministers to create new mechanisms for tax disputes between governments, and until then the standard procedure will continue to apply.

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