How to Apply for VAT Clarification to UAE Federal Tax Authority?
The VAT has been in existence in the UAE for more than two years, yet the taxable persons may still have uncertainties over specific clauses of the VAT legislation or the decisions made by the Federal Tax Authority (FTA). The taxable persons are allowed to request to the FTA about the VAT uncertainties by submitting a VAT Clarification Form. The businesses can apply for VAT Clarification if the uncertainty persists even after studying the VAT legislation, regulations, and the guidelines issued by the FTA. There are specific guidelines that shed light on how to submit the VAT Clarification form, for which the businesses can consult with the best tax consultants in Dubai. Here is a glimpse of the guidelines regarding submitting the UAE VAT Clarification form.
What is a VAT Clarification as per the Federal Tax Authority?
A VAT clarification in FTA’s words are written guidance that advises the applicants on FTA’s interpretation and stance on particular matters of VAT uncertainty subject to the Tax Authority’s regulations and terms & conditions. The FTA’s answers to your queries apply only to you and the specific VAT matter in which you sought the FTA’s clarification. The FTA’s response to the specific request is not applicable to other taxable persons or to the applicant himself while dealing with materially different VAT transactions in the UAE.
Who can Apply for VAT Clarification in the UAE?
Any person who seeks a technical clarification from the FTA on specific VAT matters can use the clarification form provided they have researched the relevant laws before filing the application. However, the person has to be a taxable person registered with the FTA. For more information on the VAT clarification form, consult with the best tax consultants in Dubai.
Valid Reasons for Submitting the Clarification Request
A VAT clarification request can be submitted to the FTA either by the taxable person or through registered tax agents in the UAE. However, before submitting the UAE VAT clarification, you should check if your request is meeting the following conditions set out by the FTA:
- Uncertainty over the VAT issue persists even after analyzing the relevant tax legislation, regulations, and guidance issued by the FTA
- The taxable person has a material interest in the VAT matter
- The particular VAT issue has not been addressed by the FTA in its previous clarifications
The FTA will not issue a clarification on the particular VAT matter you raised, if the issue doesn’t fall under any of these reasons. To ensure your request is valid under the FTA regulations, consult with reputed tax consultants in Dubai before filing the form. Tax agents in Dubai can also provide you with the other major reasons why FTA won’t respond to your clarification request.
Grounds for Not Issuing the VAT Clarification
The FTA will not issue a clarification to your request in the following circumstances:
- If the VAT matter in question doesn’t fall under FTA’s guideline for clarification
- If you fail to fill the VAT Clarification form correctly
- If the details in the VAT clarification form are incomplete or FTA demands more information
- If the FTA decides there is no genuine uncertainty in the matter you have raised in the application
- If the request is about the VAT treatment of transactions that the FTA suspects are for tax evasion
- If you are seeking tax planning advice from the FTA
- If the application is related to a matter raised in tax assessment, audit, or inspection by the FTA
Always follow the guidelines to understand what reasons make you eligible for applying for VAT clarification and what makes you ineligible. Moving the application through expert tax agents in Dubai is the right strategy to receive a prompt response from the FTA regarding your VAT matter.
How to File a UAE VAT Clarification?
If you think you have a valid VAT-related query and the uncertainty on the matter remains unresolved even after going through the public clarifications and guidelines issued by the FTA, you can appoint a tax agent in Dubai, UAE to file the request. The tax consultant or tax agent will assist you in filing the application form with supporting documents and information.
The taxable person must submit the VAT Clarification form through an e-mail to the FTA. The FTA accepts the clarification request from registered tax agents in Dubai, UAE, or appointed legal representatives. However, tax advisers who are not registered tax agents in the UAE are not allowed to submit the application form on behalf of the taxable person.
Information Required to Submit VAT Clarification Form
Tax agents in Dubai advise that to get a prompt response from the FTA, you should furnish all the required information in the application form. The following information should be submitted:
- Soft Copy of Clarification form in PDF Format (properly filled out and completed)
- Any tax advice received, which is related to the VAT matter in question
- A formal letter describing the facts related to the VAT matter, legal references, applicant’s opinion on the matter, any alternative treatment that can be applied, and the query to the FTA on which clarification is sought
- Emirates ID or Passport plus proof for authorization if the person seeking the clarification is not registered
Time Taken for Receiving a Clarification from the FTA
If the clarification request is valid and complete, FTA normally takes 40 business days to issue a clarification on the VAT matter. If the request is incomplete, then the FTA may ask for additional information and a response would take up to 40 business days after the re-submission.
Option for VAT Reconsideration
If the clarification by the FTA is not satisfying, you can file for Reconsideration on the FTA’s decision. The Reconsideration request should be filed within 20 business days that the Clarification was received. You need to furnish valid reasons along with the Reconsideration application for which the assistance of reputed tax consultants in Dubai will come in handy. After filing the Reconsideration form, you can expect FTA’s revised decision within 20 days of the Reconsideration request.
Choose the Right VAT Consultants in Dubai, UAE
Value Added Tax is one of the few taxes the UAE levy from the businesses along with the Excise Tax in an otherwise no-tax environment. The VAT rates and treatments in various industries (transportation, education, real estate, trading, exports, healthcare, etc.) are different. Also, the VAT treatment on the supply of various services or goods within each sector also varies. This leads to uncertainty among taxable businesses. However, the FTA offers an efficient system to remove this uncertainty in which the businesses can seek clarification from the FTA through the VAT clarification form.
To file a VAT clarification, the businesses need to assistance of tax agents in Dubai, UAE who guides them in assessing the validity of the VAT matter in question. If you are looking for the best tax consultants in Dubai, then look no further than Jitendra Chartered Accountants (JCA). We have a team of Chartered Accountants who are clearly well placed to assist clients with any applications for Clarification. JCA’s tax agents in Dubai possess a wealth of local and international experience in helping businesses seeking clarification for VAT matters.