Federal Tax Authority (FTA) has recently announced the issuance of the Clearance Certificate as an additional service on its portal.
Generally, the Clearance Certificate is an official confirmation provided by the Tax Authority that a tax registrant’s tax affairs are in order.
The official guideline relating to the purpose and use of the Tax Clearance Certificate is yet to be released by the UAE Federal Tax Authority (FTA).
FTA portal has introduced the new option for obtaining the Clearance Certificate applicable to the below 4 cases:
- Below Voluntary VAT threshold
- Below Mandatory VAT threshold
- Ownership change
- Company closure
FTA limits the issuance of this Certificate to registered Companies alone(it requires trade license details) and for the sole purpose of reasons cited above.
This step has been taken by the FTA to encourage taxpayers to comply with the applicable tax laws and regulations in the UAE, where taxpayers would not be able to obtain their clearance certificates if they are subject to any outstanding liability to the FTA, hence, inability to roll their business requirements further.
