When one thinks about the Middle East, the UAE and its trade-friendliness for industrialists native to the region and all over the world comes to everyone’s mind instantly. The UAE government has made tremendous efforts to ensure that the ease of doing business is always high here.
As an extension of its efforts to improve the infrastructure of the country, the government introduced VAT in the UAE on 1st January 2018 to aid the government’s efforts for the development sector.
To make the VAT filing and remittance process easier for the businesses, the government also provides them the facility to seek guidance on the VAT provisions’ that may be ambiguous or open to interpretation in certain cases. This is done using a VAT clarification form.
VAT Clarification Form
The UAE’s Federal Tax Authority has taken cognizance of the fact that even though the VAT system has been prevalent for more than two years now, the taxpayer would still have uncertainties regarding the provisions of the law and the interpretation of a circumstance unique to their business.
To enable clarification of such queries, the taxation authority has introduced the process of clarification via the VAT clarification form.
A VAT Clarification form must be considered to be guidance provided by the authorities regarding the query submitted and the circumstance unique to the business alone. It is not a general ruling but a specific resolution provided to the specific issue alone.
Who can submit a VAT Clarification form?
The major prerequisite to submitting a VAT Clarification form is that the person or the company raising the query must be valid taxpayers as per the prevailing laws of the country.
A registered FTA (Federal Tax Authority) agent can also take up the onus of submitting a VAT Clarification form on behalf of the taxpayer.
Points to be noted before Submitting the VAT Clarification Form
Since the document is being submitted for a time-sensitive query to a very occupied Government Authority, it is in the benefit of both the taxpayer and the authorities that certain guidelines are followed to avoid any issues
1. The applicant or the tax agent is liable to check the VAT laws and provisions in detail before submitting the clarification form
2. The taxpayer has a material interest in the matter
3. The query has not been resolved to its entirely in previous clarification attempts
The FTA requires the following to be submitted with the VAT Clarification form for addressing your query :
1. Duly filled VAT Clarification Form (A signed PDF )
2. Proof of authorization and identification is required for non-registered applicants
3. Tax Advice regarding the said matter.
4. A detailed letter, covering the facts of the matter, legal references, the applicant’s view, and the question to which the resolution is being sought from the authority.
All registered applicants must submit the filled and signed VAT clarification form via a soft copy from their registered email address only.
Failure to comply with any of the guidelines or failure to establish the uncertainty in the VAT provisions will be considered grounds for not issuing VAT Clarification by the authorities.
By following all the mentioned guidelines and processes, the applicant is eligible to get a response from the FTA within 40 business days.
In case, the clarification form submitted is unclear or incomplete in any manner, the FTA may choose to seek additional information, and the subsequent resolution gets moved to 40 business days from the re-submission date.
VAT Clarification form is a valuable tool for every business, as it is an opportunity for them to present their queries in front of the authorities in a clear manner. Filling the VAT Clarification form correctly as per the guidelines is the key to obtaining a swift resolution in these matters.
For businesses who are not adept at these matters, they can seek the guidance of FTA registered Tax Agents, to make the process easier and productive.