The Refund of Fees for Private Clarification Requests

Federal Tax Authority, UAE has opened the window for private clarifications where any taxable person who requires any kind of clarity in the Law, can request a private clarification to the authority. The authority responds to such queries within the prescribed timeframe.

FTA has given the details of instances where the private clarification request will not be accepted like;

• The clarification form is incomplete.
• If already FTA has given clarity on the topic.
• The clarification is seeking and FTA believes it is for avoiding taxes

The Private Clarification can be submitted either by a taxable person or an appointed tax agent or legal representative. The application for Private Clarification shall be submitted on the Emaratax Portal on the FTA website. The fees for submission of an application for Private Clarification are as below;

• AED 1,500/- for clarification relates to only one tax (Example:- Private Clarification on Corporate Tax)
• AED 2,250/- for clarification relates to more than one tax ( Example:- Same question applicability for both Value Added Tax and Corporate Tax)

On 19 July 2024 Federal Tax Authority issued FTA Decision No. 5 of 2024 on refund of Fees of Private Clarification Requests  which has provided clarity on the circumstances under which a refund of fees paid to the FTA may be possible.

Article 1 of this FTA Decision has explained that FTA may refund the fee paid for private clarification in case the authority decide not to issue a clarification. At the time of refund it may either;

• A full refund -in case the private clarification is for one tax purpose or more than one tax and no clarification issued by the FTA) or;
• A partial refund -in case the private clarification is submitted for more than one tax and FTA issued a clarification on one tax and not issued on another tax.

Furthermore, Article 2 of the FTA Decision No.5 of 2024 has explained the cases of refunding Private Clarification request fees.

• The Applicant has withdrawn the Private Clarification request within 2 days from the date of application.
• Any person who is not registered for Corporate Tax and requested a Private Clarification relating to Corporate Tax, other than registration of Corporate Tax.
• The cases where FTA is coordinating with the Ministry of Finance to amend the tax legislation and the taxable person seeking Private Clarification on the same topic.
• The applicant is subject to a tax audit by FTA at the time of submitting the request for Private Clarification.
• Where the Private Clarification request is related to the procedures that should be applied as a result of a decision issued by the Authority.
• Where the Private Clarification request is a duplicate one since the same taxable person has submitted a request with same subject and documents.

This decision will come in effect from 01 August 2024.

To learn more about Refund of Fee Paid to Federal Tax Authority for Private Clarification, book a free consultation with one of the Flyingcolour team advisors.

Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.