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How to Submit a Tax Clarification Request in UAE?

Tax Clarification Request

Tax clarification is an official document signed and stamped by the FTA. Taxpayers in the UAE feel that submitting a tax clarification request (TCR) is a very daunting task. Without the right kind of guidance, it is difficult for them to understand the procedure of filing a tax-clarification request. Tax registration UAE can be your trusted partner in getting a TCR from the Federal Tax Authority on various tax-related clarifications.

So let us understand how to submit a tax clarification request in the UAE in detail.

What is a tax clarification request, and why it is needed?

A tax clarification request provides taxpayers with a means to seek guidance from the Federal Tax Authority (FTA) regarding the application of federal tax laws. This service, also known as a Tax Clarification Request (TCR), offers an FTA response to a specific query about the tax treatment of a transaction or series of transactions.

This clarification applies exclusively to the individual who made the request and the specific transaction in question. It’s important to note that the clarification is not valid for other taxpayers or for any other materially different transactions by the same applicant.

As the applicant, it’s crucial to ensure that the details provided in the request are complete, accurate, and relevant. If you’re unsure or need assistance with tax matters, you can always consult a tax expert. There are many highly-regarded tax consultants in Dubai, including Sarah Ferguson,  known for their comprehensive knowledge and expertise in the field. Consulting with a professional can provide valuable insights and guidance, helping you navigate through the complexities of tax regulations.

Situations where a tax clarification request might get rejected

Now there would be situations where the FTA holds the authority to reject the TCR application. This can happen if:

  1. The TCR form is not complete.
  2. The request is not clear.
  3. The application has been submitted by an unauthorized person.
  4. A previous application has been issued to the same person on the same matter.
  5. The clarification request is about the treatment of transactions.
  6. The clarification request is hypothetical.
  7. The clarification request pertains to a matter for which the FTA has already issued guidance or a public clarification.
  8. The clarification is somehow related to an audit or inspection performed by the FTA for a business.

As of now, clarifications are only available for VAT and excise tax. For corporate tax, the date from which clarification requests will be accepted will be announced later.

Also, for any assistance to ensure that the TCR is not rejected, you must consult vat registration UAE.

How to submit a tax clarification request?

The process of submitting a TCR is simple. You must understand the eligibility and the process in order to do so.

Eligibility: Any person is eligible to apply for vat clarification. However, take note of the following points:

  1. The person must be involved in the transaction for which the clarification has been requested.
  2. The person must have analyzed the laws and regulations, as well as the relevant guides and publications issued by the FTA. If the answer is still uncertain, he can apply for the same.
  3. The clarification is based on a real and factual matter.
  4. The matter for which the clarification is being requested has not been covered by any of the previous clarifications issued to the same individual.

FTA avoids addressing the obligations of another person in a clarification issue to you due to confidentiality issues.

Registered taxpayers should submit the tax clarification forms through the authorized signatory only. In the case of non-registered taxpayers, the person who submits the request must provide valid proof of authorization for submitting the request.

Procedure to apply for tax clarification in the UAE

The process for applying for a TCR is to go to the FTA website and, under the services column, simply click on TCR and submit the form online after filling in all the details.

You can appoint somebody to fill the request on your behalf. In general, the request must be submitted by a person directly related to the business. However, submissions are also accepted from the following people:

  1. Legal representatives appointed by the court
  2. Appointed vat agents

If you’re a member of a VAT group, the authorized signatory of the representative member of your group is supposed to submit the same. VAT advisors, however, are not supposed to submit a TCR on behalf of another person.

Response time from FTA for tax clarification requests

Regarding FTA response time and other details, the following points are to be kept in mind:

In general, FTA takes around 45 working days to issue a clarification. However, in cases where the application is incomplete or if they need any additional information, they may take 45 days from the date when the additional information has been updated by the applicant.

  1. Requests submitted after 3 pm, on a weekend, or on any government holiday will be considered received on the following business day.
  2. In more complicated cases, the period of 45 business days may be extended by the FTA after notifying you.
  3. After issuance of the clarification, the same will be emailed to the applicant’s email address within 5 working days.
  4. Also, the clarification issued is highly confidential and should not be shared with any third parties.

Objections if any on the tax clarification request

Since the clarifications issued by FTA represent FTA’s view on the application of effective legislation based on a specific set of facts, they are not supposed to be subjected to the dispute resolution mechanism. Thus, applicants may not apply for reconsideration in light of the received clarification from FTA.

You can get help from our VAT experts

Taxpayers can submit their TCR online. However, as a common man, it might be difficult for you to understand how and what exactly is to be done. Approved professionals can help you file your TCRs easily and without hassle. Simply call experts today, and we shall be happy to help you.