The Federal Tax Authority (FTA) has introduced Decision No. 2 of 2025, effective as of 1 March 2025, clarifying how businesses can request official clarifications, directives, and make adjustments to VAT records, covering issues like tax invoices, credit notes, export evidence, and input tax apportionment
Who Can Use This?
All VAT-registered businesses in the UAE benefit from these simplified rules, including those updating transaction data, dealing with minor VAT errors, or requiring tailored approval for recovery methods or administrative exceptions
What It Applies To
- Requests for private or public clarifications on VAT law interpretation
- Submissions for administrative exceptions (e.g., invoice formats, proof of export)
- Applications for alternative input tax apportionment methods
- Advance Pricing Agreements (APAs) to be accepted later in 2025
Why It Matters
- Encourages compliance through clarity- you no longer need to guess your obligations.
- Reduces the risk of future penalties by ensuring correct processes are in place upfront.
- Offers official backing for handling exemptions and calculation methods.
What You Should Do
- Identify your VAT pain points: invoice disputes, input tax apportionment, export evidence, etc.
- Use the FTA portal to request clarifications or directives on any uncertainty.
- Apply for admin exceptions or alternative apportionment via the official form.
- Keep track of FTA responses to ensure full compliance moving forward.
If you’ve already updated your records or adjusted your VAT filings, great! However, if you’re still unsure, it’s time to take action.
Need Help Navigating These Changes?
KLOUDAC can assist you in preparing clarification requests, applying for administrative exceptions, and navigating input tax recovery methods. Stay audit-ready, compliant, and confident.