The Federal Tax Authority (FTA) has announced that, effective August 1, fees paid for “private clarification” of tax issues will be refunded in specific cases if the clarification is not issued.
This update comes as a part of Federal Tax Authority Decision No. 5 of 2024, issued on July 19.
Overview of Private Clarification Service
Since June 1, 2023, companies have been able to request further clarification on one or more taxes from the FTA, a service for which they were required to pay a fee. The new policy ensures that if a request is not addressed, the full fee will be refunded.
Additionally, if a clarification is issued for only one tax when multiple were requested, a partial refund will be provided. The refund amount will be calculated based on the difference between the fee for multiple taxes and the fee for a single tax.
Conditions for Fee Refund
The decision outlines several scenarios where a fee refund will be applicable:
- Withdrawal of Request: If the private clarification request is withdrawn by the applicant within two business days of submission.
- Non-Registered Applicants: If the request is submitted by a person not registered for Corporate Tax, and the subject is unrelated to tax registration inquiries.
- Ongoing Tax Audits: If the applicant is under a tax audit by the Authority at the time of submitting the request.
- Procedure-Based Clarifications: If the request pertains to procedures resulting from a decision issued by the Authority.
- Duplicate Requests: If the request duplicates another private clarification request with the same subject and documents submitted by the same applicant that the Authority is already processing.
- Legislative Amendments: If the request concerns a subject on which the Authority is coordinating with the Ministry of Finance to amend the relevant tax legislation.
Implications for Businesses
This new policy is a significant development for businesses seeking clarity on their tax obligations. It ensures that companies are not financially penalized for unanswered requests and provides a fair approach to handling multiple tax queries. The FTA’s initiative reflects its commitment to transparent and efficient tax administration, aiming to enhance the relationship between taxpayers and the tax authority.
For more details on the refund policy and to submit requests, businesses can visit the FTA’s official website.
