On 26 September 2023, FTA has released Decision No. 13 of 2023 on Determination of Conditions for Conversion of Amounts Quantified in a Currency other than the AED. It states that a taxable Person who uses a currency for accounting purposes other than the UAE Dirham shall convert such amounts to the UAE Dirham for the purposes of calculating the Corporate Tax Payable and submitting the related Tax Return, in the following order: -:-
- The spot rate published by the Central Bank of the UAE as per the date of the transaction– if the accounting system of the Taxable Person is able to convert the currency of each transaction, or the number of transactions makes it practical to convert the amounts manually.
- If it is not practical to use the spot rate, the average monthly exchange rate of the Central Bank of the UAE can be used.
- If it is not practical to use the above exchange rates, the average annual exchange rate of the Central Bank of the UAE can be used.
The Taxable Person shall use the above currency conversion method continuously to calculate all relevant amounts throughout the Tax Period.