In a move aimed at enhancing clarity and support for taxpayers in the UAE, the Federal Tax Authority (FTA) has introduced new guidelines under Decisions No. 4 and No. 5 of 2024. These decisions, which took effect on 1 July and 1 August respectively, are set to streamline the process for seeking private clarifications on corporate tax matters.
Under Decision No. 4, businesses and individuals can request detailed clarifications on specific aspects of corporate tax law through a structured application process. The FTA will issue a binding private clarification, provided the facts and legal framework remain unchanged. However, the FTA reserves the right to reject requests deemed hypothetical, redundant, or related to ongoing audits.
Decision No. 5 addresses the refund of fees associated with these requests, allowing for full or partial refunds under certain conditions, such as the withdrawal of an application within two days or FTA’s refusal to issue a clarification due to various reasons, including ongoing audits or pending legislative changes.
These decisions are part of the FTA’s broader initiative to enhance the transparency and effectiveness of tax administration in the UAE, ensuring that taxpayers have the necessary guidance to comply with the nation’s evolving tax laws.
Article 59 of the Federal Decree allows individuals to apply to the FTA for an advance pricing agreement (APA) concerning a proposed or existing transaction or arrangement. According to Decision No. 4, a detailed procedure for submitting these applications and issuing APAs will be announced in the fourth quarter of 2024.
