UAE Announces New Refund Policy for Unissued Tax Clarifications

Starting August 1, the UAE's Federal Tax Authority (FTA) will refund fees for tax clarification requests that aren't answered. This new policy aims to make the tax system fairer and more efficient.

From June 1, 2023, companies in the UAE could pay for "private clarifications" on tax issues. However, if the FTA doesn’t provide the clarification, the fee will now be refunded.

How Does It Work?

• - If a company asks for clarification on multiple tax issues but receives an answer for only one, they will get a partial refund.
• - The refund is calculated based on the difference between the fee for multiple taxes and a single tax.

When Will Fees Be Refunded?

According to Federal Tax Authority Decision No. 5 of 2024, issued on July 19, fees will be refunded if:

• The request is withdrawn within two business days.
• The applicant is not registered for Corporate Tax and the question isn’t about tax registration.
• The applicant is being audited when they submit the request.
• The request is about a procedure following a previous decision by the FTA.
• The request is a duplicate of another ongoing request by the same applicant.
• The issue is being coordinated with the Ministry of Finance to amend tax laws.

These changes aim to boost transparency and trust in the UAE’s tax system, ensuring that businesses get value for their money when seeking tax clarifications.