UAE | Indirect Tax | Transfer Pricing
July 17, 2024
UAE FTA Announces Update to Tax Clarification Policy
Possibility to apply for APA and obtain Clarifications
On July 15, 2024, the UAE Federal Tax Authority (FTA) introduced Decision No. 4 of 2024, which amends its policy on issuing tax clarifications and directives. Effective from July 1, 2024, this decision aims to improve transparency and efficiency in tax administration.
Key changes include:
- Clarification Requests: Taxpayers must use a specific form on the FTA’s website to request private clarifications, providing all necessary documents. Requests may be rejected if they duplicate existing information, are hypothetical, or involve audits.
- Consultation with Ministry of Finance: The FTA will consult with the Ministry of Finance when tax legislation is unclear, ensuring alignment with national policies while protecting taxpayer confidentiality.
- Public Resources: The FTA will continue to issue public clarifications, guides, and e-learning resources, reviewed by the Ministry of Finance.
- Advance Pricing Agreements (APAs): Starting in Q4 2024, taxpayers can apply for APAs to agree on transfer pricing methodologies under the Corporate Tax Law.
The updated policy aims to enhance the clarity and responsiveness of tax guidance, supporting a more transparent tax environment in the UAE.
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