On 1 March 2025, the UAE Federal Tax Authority (FTA) brought two new decisions into force that reshape several tax-administration processes. Below is a concise breakdown of what changed and why it matters to your organisation.
FTA Decision No. 1 of 2025
Cases for Extending Deadlines on Tax Assessment Reviews & Reconsiderations
The FTA may grant extra time to file a tax-assessment review or a request for reconsideration when the delay stems from circumstances such as:
The FTA will not extend a deadline if the delay was due to:
Effective date: 1 March 2025
FTA Decision No. 2 of 2025
Internal Policy on Clarifications & Directives
Released on 19 February 2025 and effective from 1 March 2025, this decision sets a formal framework for how the FTA issues:
a. Clarifications
b. Directives
What This Means for Your Business
Cases for Extending Deadlines on Tax Assessment Reviews & Reconsiderations
The FTA may grant extra time to file a tax-assessment review or a request for reconsideration when the delay stems from circumstances such as:
- a serious accident or illness affecting the authorised signatory
- a temporary, uncontrollable business disruption
- damage to records caused by a disaster
- data loss during a sudden IT-system changeover
- any other force-majeure event at the FTA’s discretion
The FTA will not extend a deadline if the delay was due to:
- lack of awareness of tax obligations
- negligence by a third-party adviser (e.g., tax agent)
- the complexity of the underlying tax issue
- the applicant simply being “too busy”
Effective date: 1 March 2025
FTA Decision No. 2 of 2025
Internal Policy on Clarifications & Directives
Released on 19 February 2025 and effective from 1 March 2025, this decision sets a formal framework for how the FTA issues:
a. Clarifications
- Eligibility & rejection criteria for private and public clarifications
- Minimum information required (see Annex A of the Decision)
- When the FTA consults the Ministry of Finance—especially on BEPS Action 5 topics
- Binding effect, scope, and expiry of issued clarifications
- Turnaround timelines and procedures for additional information requests
b. Directives
- Administrative exceptions (e.g., alternative formats for tax invoices or proof-of-export)
- Input-tax apportionment decisions—fixed recovery percentages for VAT periods
- Advance Pricing Agreements (APAs)—FTA will accept unilateral APA requests starting Q4 2025
What This Means for Your Business
- Plan ahead: Tighten your filing calendars to avoid relying on deadline extensions.
- Strengthen documentation: Robust record-keeping helps prove force-majeure events if an extension is required.
- Leverage clarifications: Early engagement with the FTA can provide binding certainty on complex transactions.
- Explore reliefs: Administrative exceptions and input-tax apportionment decisions can streamline VAT compliance.
- Prepare for APAs: Multinationals should start gathering transfer-pricing data well before Q4 2025.