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:
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.