The UAE Federal Tax Authority (FTA) has issued Decision No. 2 of 2025, effective from 1 March 2025. The decision updates previous policies on tax clarifications and directives.The decision outlines the process for issuing private and public clarifications, guides, and e-learning materials. It also sets out the procedure for administrative exception decisions, input tax apportionment rulings, and advance pricing agreements (APAs).
A key change states that when the FTA releases a public clarification or guide on a topic already covered by a private clarification, the private clarification will no longer be valid from the date of the public clarification or guide.
The decision also introduces a process for input tax apportionment, allowing taxable persons to request approval from the FTA to apply a specific recovery percentage for reclaiming input tax in a tax period, based on the percentage from the previous tax year.
For APAs, the decision confirms that applications for unilateral agreements will be accepted starting in the fourth quarter of 2025. The FTA will announce the timeline for other APA applications at a later date.
The decision establishes procedures for tax rulings and compliance requirements in the UAE.
