Private Clarifications in the UAE: How to Obtain and Use Them

Private clarifications issued by the UAE Federal Tax Authority (FTA) give businesses an official, legally binding position on how tax law applies to their specific circumstances. As the UAE tax system continues to develop, private clarifications have become a practical tool for reducing uncertainty, lowering the risk of tax assessments, and supporting confident decision-making on complex transactions.

What Is a Tax Ruling?

In most jurisdictions, a tax ruling is an official written response from the tax authority or finance ministry. It addresses a taxpayer’s question about how tax law will apply to a specific situation or planned transaction. The need for a ruling typically arises when the legislation is ambiguous, and the taxpayer cannot assess the tax consequences of a proposed action with reasonable certainty.

Different countries take very different approaches to tax rulings – in terms of who can apply, the binding effect on the authority, and how much weight rulings carry in court. In the best-case scenario, an official ruling that a taxpayer strictly followed can protect them from penalties if the authority later changes its position and attempts to impose liability. In the UAE, this mechanism takes the form of a private clarification issued by the Federal Tax Authority.

The Right to Request a Private Clarification in the UAE

As the UAE tax framework is still evolving rapidly, entrepreneurs who choose to set up a business in the UAE often face new and complex tax issues. The FTA, as the body responsible for administering taxes, regularly publishes public guides to help taxable persons understand their obligations and support voluntary compliance.

Where the applicable legislation and all publicly available FTA materials do not resolve the uncertainty, taxable persons have the right to apply to the FTA for a private clarification. This right extends to all taxes currently in force in the UAE, including Corporate Tax, VAT, and Excise Tax.

For example, Article 59 of the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022) explicitly grants any person the right to request a clarification from the FTA on how that Law applies to their situation. The same article also allows a person to apply for an Advance Pricing Agreement in relation to a proposed or concluded transaction or arrangement.

Legal Status of Private Clarifications in the UAE

Binding Effect and Scope of a Private Clarification

A private clarification is an official document issued by the FTA in response to a specific unresolved tax question, addressed to a named taxable person. It is signed and stamped by the Director General of the FTA or an authorised representative. Once issued, the taxable person has the right to rely on it when determining their tax obligations, and the FTA is bound to act in accordance with it.

A private clarification applies exclusively to the taxable person or tax group that requested it. Third parties may not rely on it – even if their situation appears identical. In exceptional cases, and at the FTA’s discretion, a clarification may be issued in response to a joint request submitted by several parties to the same transaction.

The FTA is bound by the position set out in the clarification only under two conditions. The taxable person must act in accordance with it, and the facts must remain consistent with those described in the original request.

Validity Period

A clarification remains valid indefinitely unless it specifies an expiry date. The FTA may set a period after which the clarification ceases to apply. In any case, a clarification automatically lapses if the legislation on which it is based is amended.

The FTA may withdraw a clarification if it identifies an error in the original position. A subsequent clarification on the same question supersedes the earlier one. If the FTA publishes a public clarification or guide covering the same issue as a private clarification, the private clarification ceases to apply from the date of that public document.

Invalidity of a Private Clarification

A clarification is void from the outset and cannot be relied upon if:

• the facts stated in the request, or subsequently provided by the taxable person, differ from those of the actual transaction;
• there has been fraud, misrepresentation, or failure to disclose a material fact; or
• any condition set out in the FTA’s clarification has not been met.

The FTA bases its clarifications solely on the information and documents submitted by the applicant. It does not independently verify the facts stated, but may request additional information if needed.

A private clarification does not constitute a formal FTA “decision”. The applicant cannot appeal a clarification or request a review. However, if the facts materially change from those described in the request, or new information emerges that could affect the position, the taxable person may apply to the FTA for a new clarification.

Private vs Public Clarifications in the UAE

Private and public clarifications serve different purposes and carry different legal weight. A private clarification reflects the FTA’s position based on a specific taxable person’s facts and is addressed solely to that person. Public clarifications, by contrast, are published for all taxable persons and provide general guidance on the interpretation of tax rules.

Private Clarifications	Public Clarifications / Guides
Available to the applicant only	Available to all taxable persons
Legally binding on the FTA (provided facts and law remain unchanged)	Not legally binding, but authoritative guidance on FTA’s approach
Issued on request by the taxable person	Issued periodically at FTA’s initiative
Addressed solely to the applicant; not publicly available	Published for general use
Subject to a fee	Available free of charge

When Does a Business Need a Private Clarification?

The primary reason to seek a private clarification is genuine uncertainty about the tax treatment of a specific transaction or situation. Such uncertainty exists only where, after reviewing the applicable UAE legislation and all publicly available FTA materials, the correct tax treatment remains unclear.

Examples of situations where a UAE business may need a private clarification:

• A business is considering setting up a company in a free zone, but it is unclear whether its specific income will qualify for the 0% Corporate Tax rate available to Qualifying Free Zone Persons (QFZPs).
• A business wishes to confirm whether a transfer of assets or liabilities between companies in the same group satisfies the conditions for the intra-group relief under Article 26 of the Corporate Tax Law.
• A group restructuring requires assurance that it will qualify for the Business Restructuring Relief from a UAE Corporate Tax perspective.
• A UAE-based international company with foreign branches or operations needs to confirm its eligibility for Foreign Tax Credit under Article 47 of the Corporate Tax Law.
• A business makes a mixed supply of goods and services and needs a ruling on the correct UAE VAT treatment.

Issues raised in private clarifications are passed to the Ministry of Finance in anonymised form. This internal process helps identify areas where legislative changes or new public guidance may be needed. Private clarifications can therefore indirectly influence the development of public guidance and even future legislative amendments.

How to Submit a Private Clarification Request

Submitting the Request to the FTA

The private clarification process is conducted entirely online through a transparent, standardised procedure. Requests are submitted via the EmaraTax portal by completing the dedicated form and uploading the required supporting documents. Applications may be submitted in English or Arabic; the clarification will be issued in the same language as the request.

A request may be submitted by the taxable person, their authorised signatory, a registered tax agent, a legal representative, or the representative member of a tax group. The following conditions must be met:

• The request concerns a federal tax or penalty.
• The request concerns the application of tax legislation to the facts and circumstances of the specific taxable person (the clarification will not apply to third parties).
• The request contains all information the FTA needs to provide a response.

Fees

A fee is payable upon submission. The fee structure is set out below.

Clarification scope	Fee (AED)
Single tax type (e.g., Corporate Tax only, or VAT only)	1,500
Multiple tax types within a single transaction or arrangement	2,250

Payment is made by bank card through the EmaraTax portal. The fee is non-refundable, including in cases where the request is declined – with limited exceptions.

Requirements for a Private Clarification Request

Mandatory Information

The minimum information required to submit a private clarification request includes:

• the applicant’s details (name, address, Tax Registration Number) or those of their representative;
• the estimated amount of tax or penalty affected by the clarification;
• the subject matter of the clarification request;
• a detailed description of the relevant facts and circumstances, together with any supporting documents and contracts;
• references to the applicable tax legislation;
• a declaration confirming that: all information provided is complete and accurate; the applicant has reviewed all relevant laws, regulations, and available FTA guidance before submitting the request; and the applicant agrees to provide any additional information the FTA may request.

Supporting Documents

The following documents must be uploaded with the Private Clarification request:

Covering letter – setting out the facts, the specific tax question, the relevant UAE tax legislation, the applicant’s position, and an alternative tax treatment.

Documentary evidence – any documents relevant to the request, such as contracts, invoices, correspondence, ownership structure charts, and financial statements.

Tax opinions – any external adviser opinions obtained on the question for which the clarification is sought.

Processing Timelines

The FTA must issue a clarification within 60 business days of receiving the request. If the FTA requests additional information, a new 60-business-day period begins from the date that information is received.

When the FTA requests additional information, the applicant has 40 business days to respond. If no response is received, the FTA may close the request in the system.

Grounds for Declining a Private Clarification

The FTA may decline to issue a clarification in the following circumstances:

• The question raised is already addressed in an existing FTA guide or public clarification.
• The request is based on a hypothetical scenario that does not meet the requirements for a private clarification.
• A clarification on the same matter has already been issued, or the request relates to a tax assessment raised by the FTA.
• The applicant is currently under a tax audit and the request relates to the subject of that audit.
• The FTA has reason to believe the request involves tax avoidance or evasion, including the application of Article 50 of the Corporate Tax Law (the General Anti-Avoidance Rule, or GAAR) or equivalent provisions of applicable Double Tax Treaties.
• The applicant is in effect requesting tax advice – for example, asking what steps to take in order to qualify for a particular status or benefit.

The full list of grounds for declining a request is set out in the official TPGPC1 guide published by the FTA.

Common Mistakes When Applying for a Private Clarification

The following errors – highlighted in the FTA’s TPGPC1 guide – commonly lead to delays, requests for additional information, or outright rejection:

• The request is submitted by the taxable person’s tax consultant or adviser who does not hold the status of a registered tax agent with the FTA.
• Not all required fields on the request form have been completed.
• The accompanying information or documents are insufficient for the FTA to issue a clarification.
• The request form, covering letter, and supporting documents are inconsistent with each other.
• The request does not include the applicant’s own analysis of the issue with references to the applicable tax legislation.
• The request falls outside the scope of private clarifications – for example, it relates to a review of a tax assessment, an administrative VAT exception, an advance pricing agreement, a tax residency certificate, technical issues with IT systems, or other matters that have dedicated service channels.
• The information requested is already available in existing FTA public clarifications or guides.

How to Prepare an Effective Private Clarification Request

An effective request depends on four factors: submission by an authorised person, relevance to actual facts, completeness of information, and a clearly formulated question.

The core substantive content should be presented in the covering letter, which is best structured as follows:

1. Background – a clear description of the transaction or arrangement, identifying the parties, whether it is a one-off or recurring matter, and the relevant timing, with references to supporting documents and specific provisions.
2. The Request – a clearly formulated question identifying the specific tax uncertainty on which a clarification is sought.
3. Legislation Reviewed – the laws (with references to specific articles and clauses) and any FTA public guides or clarifications reviewed by the applicant before submitting the request.
4. Analysis and Position – the applicant’s own analysis based on the facts and applicable UAE legislation, and a conclusion on how the tax uncertainty should, in the applicant’s view, be resolved.
5. Alternative Approach – possible alternative interpretations of the tax uncertainty, together with reasons why the applicant considers them less appropriate than the primary position.

Conclusion

Private clarifications in the UAE are a valuable and practical tool available to taxable persons. They allow a company to obtain the FTA’s official, legally binding position on how the tax legislation applies to a specific situation. A clarification obtained in response to a carefully prepared request strengthens legal certainty, protects against potential penalties, and enables the company to make informed decisions on complex transactions.

At the same time, private clarifications should be treated as a supplementary tool. They are appropriate when neither the legislation nor the FTA’s public guidance resolves the uncertainty. Before submitting a request, it is worth reviewing the position with a UAE tax adviser. Many questions turn out to be already addressed by existing legislation or FTA public guidance, and identifying this early avoids unnecessary cost and delay. 

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