UAE Refund Policy for Tax Service Fees – Introduction
In a bid to enhance the UAE’s attractiveness as a business hub, the Federal Tax Authority (FTA) has introduced a new policy aimed at improving the nation’s competitive edge.
One of the key developments is the issuance of Resolution No. 5 of 2024, which establishes a refund policy for fees associated with private clarification requests on tax matters.
This new policy took effect on 1st August 2024.
Background
Since 1st June 2023, the FTA has offered a private clarification service that allows businesses to request detailed information about specific tax regulations.
This service is provided for a fee, enabling companies to gain clarity on complex tax issues.
The newly introduced Resolution outlines the circumstances under which these fees can be refunded.
Conditions for Fee Refunds
General
Under the new Resolution, several scenarios have been identified where the FTA will issue a refund for the fees paid:
Single Tax Clarification
If a request pertains to one specific tax and the FTA fails to provide a response, the full fee will be refunded.
Multiple Tax Clarification
For requests covering multiple taxes, if the FTA does not provide any clarification, a full refund will be issued. If the FTA only addresses one of the multiple taxes queried, the applicant will receive a refund for the difference between the fee for multiple taxes and the fee for a single tax.
Other Refund Scenarios
- If the applicant withdraws their request within two business days of submission.
- If the request is made by an entity not registered for tax, and the query does not relate to tax registration.
- If the applicant is undergoing a tax audit by the FTA at the time of the request.
- If the request concerns actions required following an FTA decision.
- If the request duplicates another identical request already being processed by the FTA.
- If the clarification sought pertains to a matter under review for potential legislative changes in coordination with the Ministry of Finance.
Corporate Tax Registration Reminder
Alongside these new refund guidelines, the FTA has reminded legal entities with licenses issued in any June to register for corporate tax by 31st August 2024.
Failure to comply with this deadline could result in administrative penalties.
Detailed information about these deadlines and other important decisions can be found on the FTA’s official website.
UAE Refund Policy for Tax Service Fees – Conclusion
The introduction of this refund policy by the FTA underscores its commitment to transparency and business support.
By offering these refunds, the FTA aims to facilitate easier navigation of the tax landscape for businesses, thereby promoting a more business-friendly environment in the UAE.
This proactive approach reflects the FTA’s dedication to maintaining a competitive edge in the global market while ensuring that businesses operating in the UAE have the clarity they need to comply with tax regulations effectively.
Final thoughts
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