FTA releases guide on Clarifications

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a user guide on Clarifications and the corresponding Clarification Application Form. The guide is useful in that it discusses what Clarifications are, what the requirements are to apply for a Clarification, and who can submit a Clarification request on a person's behalf.

In brief, the Guide sets out what the intention of the Clarification process is, and what the intended outcomes should be.  It sets out the process, and the authorizations required, and who is entitled to make a request for clarification of the law.

In this regard, essentially, the Clarifications process is intended to address situations where:

• The matter is still uncertain after the person has analyzed the relevant tax legislations, regulations, and guidance issued by the FTA
• The person has a material interest in the matter
• The matter has not been addressed by a previous Clarification issued by the FTA

As such a Clarification should include the following documents:

• A completed Clarifications Form (soft copy signed in PDF format)
• Any tax advice received regarding the matter
• A formal letter detailing the facts of the matter, legal references, the applicant's view, any alternative treatment that the applicant thinks may apply, and the question that the applicant is asking the FTA to clarify
• If the person requesting Clarification is not registered, identification (either Emirates ID or passport copy) plus proof of authorization are required
• If the person is registered, the email must be sent by the authorized signatory of the registrant

For valid and complete Clarification requests, a response may take up to 40 business days. For incomplete requests, the FTA will request additional information, and a response can take up to 40 business days after the resubmission.

If, after submitting the request for Clarification, the response is not what was hoped for, the applicant may apply for a Reconsideration here within 20 business days from the date that the Clarification was received. The applicant must provide detailed reasons for disagreement, and the FTA will issue a revised decision within 20 business days of the Reconsideration request.

Deloitte is clearly well placed to assist clients with any applications for Clarification, and has a wealth of local and international experience in assisting clients in precisely this area of the application of the VAT laws applicable to businesses operating in the region.