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Unveiling the Legal Authority within FTA’s Tax Guidance

March 29, 2024

The UAE’s Federal Tax Authority (FTA) stands out globally as a tax administration actively promoting tax awareness. This commitment is distinctly evident in the extensive array of publications and guidance documents accessible through its website.

In this context, it is important to clarify that while these publications and guidance materials are valuable for understanding tax regulations, they do not carry the same legal weight as legislative provisions. 

Hence, this article endeavors to delve into the legal implications and importance of the guidance and publications disseminated by the FTA on its website.

Types of Guidance

The Federal Tax Authority (FTA) disseminates various forms of guidance through its publications, each serving a distinct purpose and scope. These include, but are not limited to:

  1. Guides:

These are comprehensive, publicly accessible documents providing detailed guidance on a broader scale. Examples include tax guides tailored for entire business industries or outlining new refund mechanisms.

  1. Public Clarifications:

Detailed documents publicly available, offering specific guidance on a particular matter. For instance, a public clarification might shed insights on a recently enacted legislation.

  1. Bulletins:

High-level summary documents made publicly available, offering guidance on a specific matter. An example is a business bulletin outlining tax obligations for a specific category of taxpayers.

  1. E-Learning Modules:

Audible and visible online materials available to the public, presenting general tax guidance. These modules can cover a range of topics, such as tax invoices and credit notes.

  1. Private Clarifications:

These are private documents issued to specific taxpayers, addressing their individual requests for clarification on complex tax technical matters or uncertainties.

It is crucial to recognize that each type of guidance carries a varying degree of legal authority and significance, understanding which is essential for navigating the tax landscape effectively.

Legal Significance

In a legal context, all of the FTA’s publications (other than FTA Decisions or publications of laws and regulations) are not to be viewed as legally binding. Rather, they serve as guidelines reflecting the views and opinions of the FTA, to assist taxpayers in complying with their tax obligations. In support of this, the Federal Supreme Court of the UAE has issued a judgment wherein it confirmed that private clarifications are not ‘administrative decisions’, hence, are not subject to objections and appeals.

Conclusion

In conclusion, the FTA’s commitment to promoting tax awareness through its extensive array of publications and guidance documents is commendable. However, it is imperative to recognize the legal framework within which these materials operate. While these publications serve as invaluable resources for understanding tax regulations, it is essential to understand that they do not carry the same legal weight as legislative provisions.

The various types of guidance provided by the FTA, including guides, public clarifications, bulletins, e-learning modules, and private clarifications, each serve a specific purpose and scope. However, it is crucial to discern their varying degrees of legal authority and significance. In a legal context, these publications (excluding FTA Decisions or publications of laws and regulations) are not legally binding but rather serve as guidelines to assist taxpayers in complying with their tax obligations.

Furthermore, the distinction between administrative decisions and guidance underscores the importance of understanding the limitations of each of these. As confirmed by the Federal Supreme Court of the UAE, private clarifications are not considered administrative decisions and thus are not subject to objections and appeals.

This Article is prepared by Mohamed El Baghdady, Head of Tax and Financial Crimes, and Marwan Alnooryani, Senior Tax Associate, at Habib Al Mulla & Partners Law Firm.

Seek Legal Counsel

Our expertise in tax law and regulations allows us to provide clients with effective and accurate tax advice, taking into consideration their unique circumstances and needs. Additionally, our experience and knowledge in handling tax disputes enable us to represent clients in discussions with tax authorities, as well as in court proceedings. 

Our track record of successfully resolving tax disputes and helping clients minimize their tax liabilities has likely earned us a reputation as a trusted and reliable tax advisor. Our tax and financial crimes team, led by our Head of Tax and Financial Crimes, Mohamed El Baghdady, has successfully advised and represented clients across various industries, including, but not limited to, consumer goods and retail, services, real estate, oil & gas and banking and finance, before the government authorities, tax tribunals and courts. Our clients have been successful in multiple tax disputes before the committees and courts.

For further information, please contact, Mohamed El Baghdady, Head of Tax and Financial Crimes, on mohamed.elbaghdady@habibalmulla.com or any of the members of our team.

The content provided in this article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of this information, the article does not offer a guarantee or warranty regarding its content. The matters discussed in this article are subject to interpretation, and legal outcomes may vary based on specific facts and circumstances. We recommend that readers seek individual legal counsel before making any decisions based on the information provided. If you require specific legal advice, please contact us directly.

Contacts

Mohamed El Khatib

Principal Partner – Head of Disputes

mohamed.elKhatib@habibalmulla.com

Mohamed ElBaghdady

Partner
mohamed.elbaghdady@habibalmulla.com

Marwan Alnooryani

Senior Associate
marwan.alnooryani@habibalmulla.com

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