FTA public clarifications and tax guides

The orthodox position under the FTA framework

1. The usual starting point in UAE tax practice is simple. A private clarification is binding on the Federal Tax Authority on the same facts and for the same applicant. A public clarification is not. The orthodox view rests on the FTA’s own documents, and, at first sight, it is difficult to dispute.

2. The Guide on private clarifications[1] states in express terms that a private clarification is issued to a specific applicant in respect of a specific transaction or arrangement, and that the FTA considers itself administratively bound by it, subject to the usual limits: the facts must truly be the same, there must be no fraud or misstatement, and the legal assumptions on which the ruling rests must remain intact. The same guide also states that a private clarification ceases to be effective, among other things, where the legislation changes or where the FTA later issues a public clarification or a guide on the same subject.

3. The FTA policy[2] takes the same line. It provides that where a taxpayer obtains a private clarification and relies upon it, the Authority shall be administratively bound by it.[3] It also provides that a later public clarification or guide on the same matter may cause that private clarification to cease to have effect.[4]

4. By contrast, the same policy draws a sharp distinction between “directives”, on the one hand, and “public clarifications”, on the other. Directives are expressly described as binding on the Authority and taxpayers.[5] Public clarifications are described as published documents issued to clarify matters of uncertainty, but are expressly said not to be binding on the Authority.[6]

5. The guides and public clarifications themselves reinforce that cautionary approach. The private clarification guide contains the standard disclaimer that it is not a legally binding document, is not legal or tax advice, and does not modify the legislation. Public clarifications likewise state that they merely set out the FTA’s position and do not amend the legislation.

6. If one asks only what the documents say on their face, the orthodox answer is therefore straightforward. Under the FTA’s current framework, a private clarification has a formally recognised binding effect. A public clarification does not. A guide does not. On this narrow textual question, the common view is correct.

[1] Federal Tax Authority, Private Clarifications (24 July 2025) https://tax.gov.ae/Datafolder/Files/Guides/VAT/General%20Procedure/Private-Clarifications-EN-24-07-2025.pdf; accessed 29 March 2026.

[2] Federal Tax Authority, The Authority’s Policy on Issuing Clarifications and Directives, as amended on 23 February 2026 (effective 1 March 2026), available at: https://tax.gov.ae//Datafolder/Files/Legislation/2026/FTA-Decisio-No-5-03-2026.pdf

[3] “If the Authority has issued a clarification for the taxpayer, the taxpayer shall have the right to rely on this clarification to ascertain his tax obligation or penalty, and the Authority shall be administratively bound to implement the clarification. However, it should be noted that: … The Authority shall be administratively obligated to follow this position in circumstances where such clarification is relied upon and where the factual circumstances are the same as contained in the clarification form provided in the clarification Request”, p. 9

[4] “… where the Authority issues a public clarification or a guide clarifying the same issue of a private clarification, the private clarification shall cease to have effect from the date of issuance of such public clarification or guide”, p.10.

[5] “Directives on tax transactions are public decisions issued by the Authority in the form of a published document intended to establish the bases for the application or implementation of the provisions of tax legislation on specific tax transactions, and shall be binding on both the Authority and taxpayers”, p.25.

[6] “Directives on tax transactions do not include public clarifications issued by the Authority in the form of a published document on matters of uncertainty relating to the implementation of the applicable tax legislation in the UAE for the purpose of clarification, and which are not binding on the Authority”, p.25.

Substantive classification

7. That, however, should not be the end of the analysis. The more difficult and, in my view, more important question is not whether a public clarification is “binding” in exactly the same formal sense as a private clarification. The better question is whether the Authority may, consistently with general principles of tax administration and public law, depart from its own published clarification in a materially identical case without good reason. On that question, the answer should be far less comfortable for the orthodox position.

8. The first point is conceptual. There is a difference between saying that a document does not amend the law and saying that the Authority is free to disregard it at will. A public clarification does not create new law. Nor does a guide. But both documents publicly communicate the Authority’s understanding of the law and the manner in which it proposes to apply that law in practice. Once that is recognised, the issue becomes one of administrative self-constraint rather than delegated legislation. A tax authority does not legislate by publishing guidance. But it does commit itself, at the very least, to a publicly stated interpretative position.

9. That distinction matters because the FTA policy itself treats public clarifications and guides as normatively significant in a way that sits uneasily with the claim that they carry no meaningful binding force at all. The policy allows the Authority to refuse a request for a private clarification where the answer is already available in a guide or a public clarification. In other words, the taxpayer may be told that no private ruling is needed because the public material already supplies the answer.[1] If that is so, it is difficult to maintain that the same public material may later be ignored by the Authority in the case of a taxpayer whose facts are materially the same.

10. The same tension appears even more clearly in the rule that a later public clarification or guide may displace an earlier private clarification.[2] A private clarification is a document that is formally binding on the Authority. Yet the policy accepts that a later public clarification or guide may terminate that binding effect prospectively. That reveals something important about the internal hierarchy of FTA instruments. A public clarification may not be “binding” in the technical formula reserved to directives and private clarifications, but it is obviously treated by the FTA as sufficiently authoritative to alter the practical legal position of taxpayers who previously held a binding private ruling. That is a very strong indication that public clarifications are more than mere commentary.

11. The stronger position, therefore, is not that public clarifications are formally identical to private clarifications. They are not. The stronger position is that, once issued, a public clarification should bind the FTA in a weaker but still real administrative-law sense. The Authority should not be free to depart from it arbitrarily in cases where the material facts are the same or cannot reasonably be distinguished.

[1] The Policy, page 7.

[2] The Policy, p. 10.

Public clarifications as administrative constrain

Legal certainty, equality and fairness

12. That conclusion follows from basic principles that are especially weighty in tax law. Taxation is an area in which legal certainty, predictability and equal treatment are not secondary values. They are central. The UAE constitutional order places equality and justice among the foundational principles of the State, and provides that all persons are equal before the law.[1] The Tax Procedures Law,[2] for its part, is expressly concerned with regulating the rights and obligations of both the Authority and persons dealing with the Authority, and with establishing common rules and procedures. A system in which one taxpayer is denied a private clarification because the answer is already stated in a public clarification, yet another taxpayer is later told that the same public clarification is not binding and may be disregarded, sits poorly with those principles.

13. The point may be put more directly. There is no evident fairness-based justification for treating a public clarification as carrying less practical weight than a private clarification where the public clarification clearly describes a factual pattern that is materially indistinguishable from the taxpayer’s own case. The usual justification for the stronger status of a private clarification is that it is issued on stated facts for an identified applicant. That is perfectly sensible. But where the public clarification itself sets out the relevant factual matrix with sufficient clarity, and the taxpayer’s facts are the same in substance, the reason for denying a comparable degree of reliance largely disappears. The difference becomes formal rather than principled.

14. This is particularly true because the public clarification is, by definition, intended for general reliance:

• a private clarification speaks to one taxpayer;
• a public clarification speaks to all taxpayers facing the same uncertainty.

It would be odd if the law protected the reliance of the one-off applicant but left unprotected the reliance of the wider public at whom the clarification is expressly directed.

Legitimate reliance and coherent administration

15. One may also approach the matter through the idea of legitimate reliance. Even where a public authority’s statement does not have the force of legislation, it may nonetheless create a legitimate expectation that the authority will apply the law in the manner publicly announced, at least unless and until it changes position transparently and prospectively.

16. Although this doctrine has not yet been squarely confirmed, so far as can be seen, in a Federal Supreme Court judgment addressing FTA public clarifications, it is nonetheless compelling on general principles of administrative rationality. The very purpose of publishing a clarification is to reduce uncertainty and guide conduct. If taxpayers are expected to organise their affairs in light of the FTA’s published position, the FTA should not later be permitted to say that the position was merely informational and carried no operational consequence.

17. The role of the higher courts in safeguarding coherence and legality in public administration also supports that direction of travel. The Federal Supreme Court ensures unification of the judicial principles and upholding the rule of law. In that setting, a court faced with inconsistent tax administration would have strong reason to resist an approach under which the Authority could publish one interpretation for the public, refuse a private clarification because the matter is already publicly answered, and then apply a different interpretation in assessment or dispute without a persuasive basis for distinction.

[1] The Constitution of the United Arab Emirates, Article 25.

[2] Federal Decree‑Law No. 28 of 2022 on Tax Procedures

Limits of the argument

18. At the same time, the argument should not be overstated. The disclaimer language in guides and public clarifications cannot simply be ignored. A guide is plainly the weakest instrument. The guide itself says that it is not legally binding and does not modify the legislation. A public clarification also states that it does not amend the legislation; it merely states the FTA’s position. It would therefore be too ambitious to argue that every sentence in every guide or public clarification binds the FTA in the same rigid way as a private clarification binds it vis-à-vis the applicant. That proposition would go beyond the text.

19. The better view is that public clarifications, and in some cases guides, should not be treated as binding sources of law, yet they should be treated as binding sources of administrative position. The Authority should be required either to follow them in materially identical cases or to explain, by reference to a genuine factual distinction, subsequent legislative change, or a superior legal reason, why departure is justified. Put differently, the FTA should not be free to apply a public clarification selectively.

The place of directives in the internal hierarchy

20. That principle also fits the internal logic of the FTA regime. Article 54 bis of the Tax Procedures Law authorises the Authority to issue decisions, including guidance on the application of the Tax Procedures Law and the Tax Law to tax transactions, and contemplates decisions that are binding on both the Authority and the taxpayer. The policy reserves that highest formal status to ‘directives’, whose distinguishing feature is precisely their bilateral binding force. But the existence of a special category of decisions binding on both parties does not imply that all other published guidance is devoid of constraining effect. It merely indicates that the legal framework recognizes different degrees and forms of administrative commitment:

• directives bind both the FTA and the taxpayer in the strongest sense;
• private clarifications bind the FTA vis-à-vis the applicant on the stated facts;
• public clarifications, while lacking the same bilateral formal force, should at least bind the FTA against arbitrary inconsistency in materially identical cases.

21. That is also the only reading that preserves coherence between the different FTA instruments. If public clarifications can bar a request for a private clarification, and if they can later supersede an already binding private clarification, then they cannot sensibly be dismissed as having no practical binding significance at all. Their status is better understood as formally non-legislative but substantively constraining.

22. The same reasoning extends, though more cautiously, to guides. Where a guide contains a sufficiently precise statement of the FTA’s position on a recurring issue, and taxpayers are invited to rely on it as the public explanation of that issue, there is a serious argument that the Authority should not depart from it without explicit notice and a principled justification. The rebuttal threshold may be lower than for a public clarification, but the demand for consistency remains.

Conclusion

23. The practical conclusion is therefore twofold. In formal terms, the orthodox position remains correct: under the FTA’s present policy architecture, public clarifications and guides are not binding in the same explicit manner as private clarifications, and they certainly do not amend the law. But in substantive administrative-law terms, the better view is that a public clarification should bind the FTA to a materially consistent treatment of materially identical cases, unless the Authority can point to a real factual distinction, a subsequent change in the law, or some other compelling reason to depart.

24. That is not an attempt to convert guidance into legislation. It is simply an insistence that a public authority, especially a tax authority, should speak consistently to the public and act consistently towards the public. In tax administration, “not binding” should not mean “free to be ignored”.

Disclaimer

Pursuant to the MoF’s press-release issued on 19 May 2023 “a number of posts circulating on social media and other platforms that are issued by private parties, contain inaccurate and unreliable interpretations and analyses of Corporate Tax”.

The Ministry issued a reminder that official sources of information on Federal Taxes in the UAE are the MoF and FTA only. Therefore, analyses that are not based on official publications by the MoF and FTA, or have not been commissioned by them, are unreliable and may contain misleading interpretations of the law. See the full press release here.

You should factor this in when dealing with this article as well. It is not commissioned by the MoF or FTA. The interpretation, conclusions, proposals, surmises, guesswork, etc., it comprises have the status of the author’s opinion only. Furthermore, it is not legal or tax advice. Like any human job, it may contain inaccuracies and mistakes that I have tried my best to avoid. If you find any inaccuracies or errors, please let me know so that I can make corrections.