A Must-Read for Business Owners: Get your FTA Clarifications
Attention business owners! Until now, FTA Clarifications were for free, however, as per the new Cabinet Decision No 7 of 2023, there will be fees to apply for private clarifications. If the application is related to one tax, fees are AED 1,500 , and if more than one tax then it is AED 2,250. This change will be effective from 1 June 2023. To find out more about this Decision and how it relates to you as a business owner, read below.
What is an FTA Clarification?
The Federal Tax Authority (FTA) issues private clarifications, which are an official, signed, and stamped document, in response to a query by the applicant regarding the tax treatment of specific transactions.
FTA Clarifications: In Detail
Business owners can apply for a single tax with questions in one request for same tax type. For example, if a business owner is seeking the clarification related to VAT then they can do so by paying AED 1,500. However, if the business owner is seeking the clarification related to VAT and Excise as well then the fee becomes AED 2,250. Note that, this will be applicable from 1 June 2023. One should note that here the “tax” pertains to the applicable taxes in the UAE, i.e., VAT, Excise Tax and Corporate Tax (as of 01 June 2023).
How to Apply for an FTA Clarification
In December 2022, the FTA released a user guide on private clarifications (USEG001). As per the guide, the application must be made by the person or their authorized signatory seeking the private clarification in relation to their business. However, applications from appointed tax agents and legal (court appointed) representatives also will be accepted. If the FTA does not release a private clarification following an applicant’s request, the fees could be refunded to the taxpayer.
As the start of Corporate Tax in UAE nears, the implementation of the regime continues to progress with milestones. Hence, business owners should consider preparing private clarification requests regarding specific tax matters where uncertainty exists and guidance is required. The FTA is expected to announce the date from which private clarification applications for corporate tax purposes will be accepted, but meanwhile, if you are looking for any clarification to do with VAT and Excise tax, this is the perfect time to do so.
Do you need any FTA Clarifications? Are you familiar with the process of doing so? If not, make sure, that by 30 May 2023 you get clarity either by reaching out to us or call FTA to know more
