Under the 'private clarification' service, entities can request additional clarification on one or multiple taxes administered by the Federal Tax Authority (FTA). This service became chargeable starting June 1, 2023. The FTA has recently announced that fees for 'private clarification' may be refunded if the clarification is not provided. This refund policy took effect on August 1.
What is a private clarification on tax, and how can individuals or companies apply for it? To understand the eligibility criteria, required documents, and the application process, continue reading.
A private clarification is a document issued by the FTA in response to specific queries about the tax treatment of particular transactions. It provides guidance based on the FTA's interpretation of tax legislation and its application to the facts presented in the request. Federal taxes in the UAE include Value Added Tax (VAT), Excise Tax, and Corporate and Business Tax. The FTA provides public and private clarifications to help taxpayers understand their obligations and comply with tax laws.
Eligibility to apply for a private clarification includes individuals or companies who have reviewed relevant tax laws, regulations, and guidance but still find the answers uncertain. Applicants must stay updated with FTA publications to avoid unnecessary submissions. The clarification request must relate to Corporate Tax registration if it pertains to Corporate Tax. Registered entities must submit the clarification form via their authorized signatory, while non-registrants need to provide proof of authorization.
Required documents for a private clarification request include documentary proof supporting the factual and legal grounds of the request, such as sample invoices or contracts. A formal letter detailing the facts, legal references, and questions for the FTA is also necessary. Accepted file types are Excel, PDF, JPG, PNG, and JPEG, with a file size limit of 5 MB.
The application for a private clarification can be submitted through the FTA mobile app or the EmaraTax platform. Relevant fields include selecting the relevant tax account, entering the applicant's name, and providing the Tax Agent Approval Number if applicable. Applicants must ensure they do not submit duplicate requests and provide all necessary documents and information accurately before submission.
Fees for a single tax clarification are Dh1,500, and for multiple tax clarifications, Dh2,250, provided they relate to the same transaction and parties. Payments can only be made via the Emaratax portal using a valid card. The FTA may take up to 50 business days to respond to the application.
