CLARIFICATION USER GUIDE
The FTA has introduced a mechanism in the form of clarifications to provide the taxpayers written guidance about the FTA’s interpretation and its position on specific uncertain tax matters. The Federal Tax Authority in April 2018 issued a clarification user guide enabling the taxpayers to submit clarification requests on specific uncertain matters on which the taxpayer intends to have guidance.
ELIGIBILITY TO APPLY FOR CLARIFICATION?
Any person irrespective of the fact that he has not registered himself as a taxable person with the FTA or has not appointed a tax agent can submit a clarification request by email on specific tax matters. A person applying for such clarification should:
- Analyze the relevant tax law, regulations and guidance. In case he still does not get an answer, then he can apply.
- The person applying for clarification must be interested in the matter at hand and no previous clarification should cover the matter.
SUBMISSION OF CLARIFICATION REQUEST ON BEHALF OF ANY PERSON
The person seeking clarification is required to submit the clarification request. However, appointed tax agents or legal representatives can submit the form on behalf of the person concerned. The request is to be submitted by the representative member of the tax group in case the concerned person is a member of a tax group. Tax advisors who are not registered as tax agents cannot submit clarification requests on another person’s behalf.
REQUIRED DETAILS FOR A COMPLETE CLARIFICATION FORM
Any person applying for clarification is required to submit the details mentioned below. :
- Any tax advice received on the uncertain matter which requires clarification
- A formal letter including the details of the legal references, facts, technical view, and any alternative treatment
- Supporting details of an applicant’s identity and an authorization proof in case of non-registration with the FTA
- The email should be sent from an authorized signatory in case the person is registered.
- A tax agent applying for clarifications have to email from the address registered with the FTA and which links with the taxable person.
The field marked with an asterisk is to be mandatorily filled while submitting the form. The applicant is under an obligation to submit the below mentioned details.
- Applicant’s name
- Building name, number, street
- Type of tax to which the concern relates
- In case the FTA has issued any previous clarification addressing the question
- Estimated tax amount impacted by the technical clarification and tax amount's nature
- Whether the clarification relates to completed, current or proposed supply chain/ transaction
- Background's description including transactions, steps, and intentions of the matter that is clarification's subject
- Documentary proof supporting the legal and factual grounds of the request
- Relevant legal provisions to assess the tax treatment of the matter which is the clarification's subject
- The outcome of the technical tax evaluation
- The outcome of other alternative technical tax assessment of tax
- Analysis of the alternative tax technical positions
- Questions which the person wants FTA to answer
- Number of times that the person has submitted the request seeking FTA’s clarification during the past 12 months
SUBMITTING THE CLARIFICATION FORM
Once completed, the person is required to email the soft copy of the clarifications form in PDF format to email@example.com along with supporting documents.
RESPONSE FROM THE FTA FOR THE CLARIFICATION
The FTA answers the clarification request within 40 business days. In case the application is incomplete or requires additional information, the FTA asks for required or additional documentation. The FTA further takes 40 business days to respond to the updated clarification request after resubmission.
METHOD FOR RECONSIDERATION OF CLARIFICATION
In case of disagreement, the person can apply for reconsideration within 20 business days from the date of receiving the clarification. The person is required to specify the detailed reason for disagreeing with the FTA’s decision in the Reconsideration Application Form. In case the application fulfills all the requirements, the FTA will issue its decision within 20 business days of receipt of such application.
To sum up all, the answers provided by the FTA are only applicable to the applicant and to the specific transaction on which the applicant's ask advice. FTA’s response does not act as a precedent.