Private Clarification: New Guide Introduced for Taxpayers

Many people are unsure how specific law provisions apply to their unique situation. In the UAE, taxpayers have often faced this problem. General guides and public clarifications are available, but they do not always cover every specific case. That means businesses sometimes make decisions without knowing if they are 100% correct.

The Federal Tax Authority (FTA) has now introduced a new guide to help. This guide explains how taxpayers can use the private clarification service to get official answers directly from the FTA for their exact case.

Let’s discover with Tax Gian how private clarifications work and how our tax agents in the UAE can help you utilise the opportunity. 

What is a Private Clarification?

A private clarification is an official written response from the FTA on a specific tax question. It comes in a stamped and signed document from the Director General or an authorised representative.
It explains how the relevant tax law applies to the exact facts given by the applicant. The FTA does not check the truth of those facts but will base its answer only on the information provided.
The reply is meant only for the person or business that asked for it. No one else can use it as proof for their case.

Businesses can request a private clarification either through the e-services portal or can take assistance from a tax agent in the UAE for more transparent communication of the case.

When Will a Clarification Not Apply?

A clarification becomes void if:

• The facts in the request are different from what actually happened.
• There is fraud, false information, or failure to disclose important details.
• Any conditions set by the FTA are not met.

It also becomes null if the tax law changes or the FTA publishes a new guide on the same topic. The applicant is responsible for staying up to date with tax rules.

Who Can Apply?

The guide sets clear rules for who can request clarification:

• Any person with uncertainty about a tax matter.
• In a tax group, only the official representative member can apply through the group’s EmaraTax account.
• Approved tax agents in Dubai or legal representatives can apply on behalf of a taxpayer, but they must be registered with the FTA for that specific tax type (VAT, CT Excise Tax).

Requests from consultants or advisors who are not registered tax agents will not be accepted. Also, clarifications only address the applicant’s own tax matters, not someone else’s.

Which Matters Are Eligible?

A request must:

• Relate to federal taxes or related penalties (not penalty waivers).
• Clearly state the tax type involved.
• Apply the tax law to the applicant’s own situation.
• Include all relevant details so the FTA can decide on the correct treatment.

If these conditions are not met, the request will be rejected.

How to Apply Through EmaraTax?

All requests must be submitted online via EmaraTax. The applicant needs a user profile. If already registered for the relevant tax type, they must log in using their taxable person account. If not registered, they can still create a profile if eligible.

The application can be made in English or Arabic. The FTA will issue the clarification in the same language used in the request.

Information and Documents Required

Applicants must fill out the online form completely and upload:

• A cover letter explaining the background facts, the tax question, and the applicant’s view of the correct treatment.
• Supporting documents such as contracts, invoices, or correspondence.
• Any professional tax advice already received.

If the request involves more than one tax type, separate details must be provided for each. Tax agents in Dubai can help businesses file a request correctly with accurate and precise information to ensure a timely response. 

How much does a private clarification cost?

The fee is:

• AED 1,500 for one tax type.
• AED 2,250 for more than one tax type.

The fee is non-refundable except in some instances set out in FTA Decision No. 5 of 2024. Payment can only be made through EmaraTax using a valid bank card.

Submission and Deadlines

• Applicants can save a draft of their request, but must submit it within 40 business days after starting the application.
• Once submitted and paid, the system gives a reference number, which must be used in all communication with the FTA.
• Requests received after 3 pm on a business day are treated as received the next business day.
• A request can be withdrawn, but the fee will only be refunded if the withdrawal happens within two business days.

FTA Review Process

• The FTA checks if the applicant is eligible and if the request meets the rules. If it is accepted, they may ask for more information.
• If more details are requested, the applicant must provide them within 40 business days. Failure to do so will result in rejection.

Issuing the Clarification

The FTA aims to issue clarifications within 60 business days from receiving the request or from receiving any extra information requested. In complex cases, where more consultation is needed, this period may be extended. If the request covers more than one tax type, the FTA will issue separate clarifications for each. Businesses are recommended to engage a tax agent in Dubai for a smooth process. 

How can Tax Gian help Businesses?

At Tax Gian, our expert tax agents will help you,

• Understand your specific tax issue
• File a request for private clarification
• Make sure the information provided is accurate and precise
• Respond to the authority in a timely manner
• Make sure that your tax issue is resolved