The Tax Authorities regularly conduct project-based investigations into assets or income not declared in tax returns. Currently, the tax office is investigating real estate in Dubai. How can you recognize such an investigation? The inspector will send you a letter with questions regarding real estate in Dubai.
Tax Investigation
It is important to determine the legal basis on which the inspector is conducting the investigation. In most cases, it will be an investigation under Article 47 of the General Tax Act (Algemene Wet inzake Rijksbelastingen). This article means that you are obliged to answer questions that are relevant to tax assessment. However, you are not required to answer questions related to the determination of a penalty. Sometimes it can be difficult to recognize whether a question pertains to tax assessment or a penalty.
Tax Implications of Real Estate in Dubai
When answering questions, facts may come to light that not only relate to holding real estate, but also reveal other (income) sources. The involvement of other persons may also come to light. These individuals may not have been previously known to the tax authorities in this context. Due to the cross-border nature of the situation, other complex tax issues may arise. Among other things, the tax treaty with the United Arab Emirates (UAE) must be considered.It is important to analyze and assess what the (tax) consequences could be for you. Although the tax authorities work in these investigations with a large scale approach, experience shows us that each case is unique and requires a customized solution.
Settlement Agreement
Most of our clients benefit from approaching the tax investigation in a constructive way and without too much commotion. Our tax attorneys frequently enter into settlement agreements with the tax authorities, where they reach a solution in consultation with the inspector regarding the tax liability. Our aim is to resolve the matter for you in a smooth and practical way, without requiring too much work (and thus without incurring too many costs).
Should this not be successful, or should the tax authorities take a different position on a specific issue, we are happy to assist you in legal proceedings before the tax court.
Have you received a letter from the Tax Authorities with questions and would like to know if we can assist you? Feel free to contact us (+31631969502 or debbie.liem@vdb-law.nl).