UAE Announces Fee Refund For Tax Service Charges From August 1. In a significant update for businesses operating in the UAE, the Federal Tax Authority (FTA) has announced a new policy regarding the refund of fees for tax service charges effective August 1, 2024. This change pertains specifically to the ‘private clarification’ requests made by companies seeking additional guidance on tax-related matters.
Private Clarification
Under the ‘private clarification’ mechanism, companies could previously submit requests to the FTA for further clarification on one or more tax issues. This service, introduced on June 1, 2023, involved a fee payable by the requesting companies. The intent behind this mechanism was to provide businesses with precise guidance on tax matters that were unclear or complex.
UAE Announces Fee Refund For Tax Service Charges From August 1
According to Federal Tax Authority Decision No. 5 of 2024, issued on July 19, 2024, the FTA has revised its policy on fee refunds for private clarifications. The new policy stipulates that fees paid for private clarifications will be refunded in specific cases where the clarification is not issued. Here’s how the refund process will work:
- Full Refund for Unissued Clarifications: If a request for private clarification is made on one or more tax issues and the FTA does not issue the clarification, the full fee paid will be refunded.
- Partial Refund for Partial Clarifications: If a request involves multiple tax issues and only one clarification is issued, a partial refund will be granted. The amount refunded will be the difference between the fee for multiple tax issues and the fee for a single issue.
Cases Eligible for Fee Refund
The new policy outlines several scenarios where the fee for private clarification will be refunded, as specified by the Federal Tax Authority Decision No. 5 of 2024. These include:
- Withdrawal of Request: If the private clarification request is withdrawn by the applicant within two business days from submission, the fee will be refunded.
- Non-Registered Entities: If the request is made by an individual or entity not registered for Corporate Tax, and the clarification sought is not related to tax registration, the fee will be refunded.
- Ongoing Tax Audit: When the applicant is undergoing a tax audit by the FTA at the time of submitting the request, a refund will be issued if the clarification is not provided.
- Procedural Requests: If the request concerns procedures related to decisions already issued by the FTA, and clarification is not provided, the fee will be refunded.
- Duplicate Requests: If the clarification request is a duplicate of a previously submitted request with the same subject and documents, and the FTA is already working on it, the fee will be refunded.
- Legislative Amendments: When the subject of the private clarification request is related to an issue under review by the Ministry of Finance for potential tax legislation amendments, and no clarification is issued, the fee will be refunded.
Conclusion
This updated policy aims to enhance transparency and fairness in the tax service process, providing businesses with a clearer framework for obtaining and potentially receiving refunds for tax-related clarifications. Companies are encouraged to familiarize themselves with these changes and consider them when making future requests for private clarification.
