Private Tax Clarifications in the UAE: What’s New in July 2025

CA Prateek Chhabra

Evolution of Guidance: Key Updates in the July 2025 Private Clarifications Guide

Below, we delineate the core updates, contrasting them with the November 2024 version to highlight their impact.

i. The Taxpayer's Prerogative: A Reinforced Obligation for Vigilance

A significant addition to the “Nature of Clarifications” section unequivocally places the onus on the applicant: “The onus remains on the Applicant to stay up to date on changes in Tax Laws and guidance published on the FTA’s website”. This critical new point, not present in the November 2024 guide, clearly communicates that while private clarifications offer specific guidance, taxpayers must proactively monitor changes in tax legislation and public advisories.

ii. Differentiated Eligibility: Corporate Tax vs. Indirect Taxes (VAT & Excise Tax)

A key distinction has been introduced regarding registration requirements based on tax type:

    • Corporate Tax Clarifications
      The new guide explicitly states that for Corporate Tax, “only Applicants registered for Corporate Tax are eligible to apply for a Clarification, unless the Clarification request relates to registration, or is submitted by an Exempt Person as determined under Article 4(1) of the Corporate Tax Law”.

    • Excise Tax and VAT Clarifications
      A new point clarifies: “Taxpayers are eligible to apply for these Clarifications, regardless of whether the Person is registered for the specific Tax type or not, provided that it is an eligible matter”. This is a significant distinction, allowing unregistered persons to seek clarifications for Excise Tax and VAT under certain conditions, unlike Corporate Tax.

iii. Evolved Rejection Grounds: A More Granular Approach to Non-Compliance

The July 2025 guide introduces a clearer categorization of rejection grounds, differentiating between requests that “will be rejected” and those that “may be rejected,” and expanding the scope of both.

  • New “Will Be Rejected” Criteria:
    • Tax Agent Specialization: A pivotal addition stipulates rejection if “A Tax Agent that is not registered with the FTA for the Tax type the Clarification request relates to, for example, a Corporate Tax Clarification request submitted by a Tax Agent that is only registered for indirect Tax (i.e. Excise Tax and VAT)”.
    • Unauthorised Representation: Requests from “A Tax advisor or any other person on behalf of the Taxpayer if that Person is not registered with the FTA as a Tax Agent or is not appointed as the Taxpayer’s Legal Representative” will be rejected.

  • Updated Out-of-Scope Cases:
    • Pillar Two (GloBE Rules): Significantly, “Pillar Two (GloBE Rules)” are now explicitly identified as out-of-scope for private clarifications, with the FTA noting that “The date on which the Clarification can be submitted on the Imposition of Top-up Tax on Multinational Enterprises will be announced at a later stage”.
    • Specific Apportionment: The language around special apportionment methods is more specific, now including “and/or a specified recovery percentage”.

  • New Rejection Reason: Failure to Respond to Information Requests:
    • If the applicant “failed to submit all the requested additional information or documents within 40 Business Days from the date the request for information was sent to the Applicant”. This introduces a strict, non-negotiable timeframe for applicant responsiveness, a detail not explicitly present in the November 2024 guide for this specific scenario.

  • Re-categorization of “May Be Rejected” Cases:
    • The July 2025 guide now includes specific categories of cases that may be rejected, including “Tax Audits and Tax Assessments” and “Other cases”. This distinction was not explicitly present in the November 2024 guide which listed all rejection scenarios under a single “Grounds for rejection” section.

iv. Review and Issuance Timelines: A Clarification on Expectations

This is an area where specific timelines were previously communicated, and their presentation has been updated.

  • Then (November 2024 Guide):
    • Indirect Taxes (Excise Tax and VAT): Clarifications were to be issued within 50 business days from the date the Clarification request was received. If further information was requested, the Clarification would be issued within 50 business days from the date the further information was received.

    • Corporate Tax: Clarifications were to be issued within 60 business days from the date the request was received. If further information was requested, the Clarification would be issued within 60 business days from the date the further information was received.
  • Now (July 2025 Guide):
    • The July 2025 guide provides a unified timeline for clarification issuance: “Clarifications will be issued within 60 Business Days from the date the request was received. If further information was requested, the Clarification will be issued within 60 Business Days from the date the further information was received”.

    • This represents a change for indirect taxes (VAT and Excise Tax), moving from a 50-business-day target to a 60-business-day target, aligning it with the Corporate Tax timeline.

    • Additionally, as highlighted earlier, the July 2025 guide introduces a crucial 40 Business Day deadline for the applicant to respond to the FTA’s request for additional information. Failure to meet this deadline will result in the rejection of the clarification request.

    • The guide still notes that “In the case of complex Tax matters, e.g. where other stakeholders need to be consulted, the FTA may request an extension for issuing the relevant Clarification”.

This indicates a clear update: the FTA now communicates a consistent 60-business-day target for issuing all types of private clarifications (Corporate Tax, VAT, and Excise Tax). Alongside this, the emphasis on the applicant’s timely response to information requests within 40 business days ensures efficiency in the overall process.

In the dynamic landscape of the United Arab Emirates’ tax regulations, clarity and proactive compliance are paramount. As a consistent observer of these evolving frameworks, our prior discussion in the blog “Private Tax Clarifications in the UAE: Everything You Need to Know” meticulously dissected the Federal Tax Authority’s (FTA) guidance as of November 2024. This foundational piece provided a crucial understanding of the private clarification mechanism, a vital tool for taxpayers seeking certainty on specific tax matters.

Now, with the release of the updated Private Clarifications Guide in July 2025 (Tax Procedures | TPGPC1), the FTA has further refined its directives. This successor to our previous analysis aims not merely to reiterate the updated provisions, but to intricately connect them with their predecessors, illuminating the progression and underlying rationale behind each significant amendment.

Conclusion: Embracing Evolution for Enhanced Compliance

The July 2025 update to the Private Clarifications Guide is more than just a revision; it is a testament to the FTA’s adaptive regulatory approach. By systematically updating legislative references, refining procedural requirements, clarifying eligibility based on tax types, providing a more detailed framework for rejection, and harmonizing the issuance timelines, the guide aims to foster greater efficiency and certainty within the tax ecosystem. The subtle but important changes in how timelines are addressed also highlight the FTA’s focus on clear responsibilities for both parties in the clarification process.

For those who have integrated the insights from our Previous Blog into their compliance strategies, this new guide serves as an essential companion, charting the evolution of a critical tax mechanism.

Need Professional Assistance? Connect with RVG

The recent evolution of the Private Clarifications Guide necessitates precise understanding and strategic application. At RVG, we specialize in expert tax advisory, compliance, and in-depth regulatory interpretation. If you are navigating complex tax matters or preparing a Private Clarification request, our dedicated team is poised to assist you by:

  • Evaluating eligibility under the latest FTA guidelines.
  • Drafting legally sound, comprehensively supported Clarification submissions.
  • Proactively avoiding common rejection triggers.
  • Interpreting and implementing FTA responses effectively.

Partner with RVG to secure clarity and confidence in your tax affairs.

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