VAT Private Clarification
If a business or individual faces some unique situation in the UAE and it is not clear how VAT would be applied to such situations, the FTA provides for a VAT Private Clarification that can be requested by a business. It is a request, formally sent to FTA for clarity on any and all tax matters so that the business correctly applies VAT and does not come under any liability for non-adherence to the regulations.
What is a VAT Private Clarification?
A VAT Private Clarification is simply a formal written application made to the FTA where a business or person requests guidance on the correct treatment about a specific transaction or situation under VAT. It allows a businessman to understand how VAT laws and regulations apply to his unique situation, thereby staying within the scope of the VAT regulations.
When to Apply for a VAT Private Clarification?
- Ambiguity of VAT Application
Private clarification – if the business is having a problem identifying its VAT position, say in the case of complex transactions or new business models, it may seek private clarification to ensure guidance on the right procedure. - Tip on How Not to Commit Non-compliance
There is always a risk that the business might not know whether it has paid correctly or correctly accounted for its VAT obligation or the VAT treatment of a transaction. Application for a clarification helps the business avoid mistakes liable to attract penalties and/or interest charges. - VAT Treatment Disagreement
If the business or its advisor disagree with the VAT treatment given by another (for instance, a supplier or customer), a private ruling will be helpful in resolving the issue through authoritative guidance from the FTA.
Information Needed in Your Request
- Explanation of the Transaction
Explain in detail the transaction. Provide how VAT is applied and why a clarification is sought. - Documentation Involved
Attach any document that might affect the VAT treatment, and these include contracts, agreements, invoices, and previous VAT returns. - FTA Question
Clearly state the question or VAT issue you need help to understand. Indicate precisely what the legal uncertainty or concern is.
VAT Private Clarification Advantages
- Compliance is Guaranteed
Through clarification, business ensures that there is no non-compliance and the potential consequences that follow since the correct VAT treatment applied on their transactions. - Risk is Decreased
Reduces chances of audits and disputes since it is an official clarification from the FTA on how VAT should be applied. - Sensible Decisions
With official clarification, businesses confidently make their decisions about VAT obligations and accounting practices.
Examples of Transactions That Need VAT Private Clarification
- Complex Transactions
A cross-border service enterprise may seek whether VAT should be charged and how input VAT is recovered. - Specific Supply of Goods or Service
A business may seek clarification if a product or service it supplies does not clearly fall into a regular or exempt VAT category. - VAT Treatment of New Business Model
A new business introducing a new business model is most probably not aware of the minutest details of VAT applicability to their business and may require private clarification so that there is no lack of compliance in the future.
Why Primetax for VAT Private Clarifications?
- Professional Advisory
The VAT professionals at Primetax advise businesses on drafting private clarification submissions in an error-free and comprehensive manner. - Efficient Process
We handle everything from gathering relevant documents to making the request on the FTA portal to even follow up with your response. - VAT Solutions for Your Case Alone
We give you specific VAT advice based on your case. We keep you perfectly VAT compliant without risking much.
Frequently Asked Questions
- How long would the FTA take to respond to a request for VAT Private Clarification?
- What are the types of issues that can be addressed using a VAT Private Clarification?
- Can a business appeal the FTA’s response to a Private Clarification?
Seek help regarding VAT Private Clarifications from a professional. Talk to Primetax today! We’ll see that your VAT concerns are addressed promptly and appropriately.
