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Request Rejection on Limitation and TDRC

This study addresses a practical question which arises at the intersection of the reconsideration procedure and the statutory rules on extension of time under the UAE Tax Procedures Law.

The situation is not uncommon. A taxpayer receives an adverse decision from the Federal Tax Authority (FTA) and does not submit a reconsideration request within the ordinary period of 40 business days. The taxpayer subsequently files a reconsideration request together with an application for extension of time, supported by reasons which, in the taxpayer’s view, fall within the statutory and regulatory framework permitting late admission. The FTA then rejects the reconsideration request on the ground of limitation, without substantively addressing the grounds relied upon in support of the extension application.

The central question is whether such a limitation-based rejection should be treated as bringing the matter to an end for all procedural purposes. More specifically:

  • does the taxpayer remain entitled to bring an objection before the Tax Disputes Resolution Committee (TDRC) against the FTA’s decision, or 
  • does Article 35(3) of the Tax Procedures Law render the FTA’s position final, irrevocable and immune from further review?

The answer depends on a careful distinction between two different legal situations: 

  1. a duly considered refusal of an extension application, on the one hand, and 
  2. a bare rejection of a reconsideration request as out of time, without any real engagement with the extension jurisdiction, on the other. 

The distinction may appear procedural, but it is in fact central to the coherence of the statutory scheme. If Article 35(3) is read too broadly, the extension mechanism itself risks becoming largely ineffective. If it is read in context, however, it operates as a finality rule for genuine extension-refusal decisions, not as a shield for every limitation-based rejection issued by the FTA.

The statutory architecture: reconsideration, objection and extension

  1. The starting point is Article 29 of Federal Decree-Law No. 28 of 2022 on Tax Procedures. Clause (1) defines the ordinary reconsideration route in broad terms. It provides that: “a Person may submit a request to the Authority to reconsider any decision, or part thereof, issued by the Authority in connection to the Person, provided that the request specifies reasons, within (40) forty Business Days from the date he was notified of the decision.”
  2. Clause (2) then describes the FTA’s function at the reconsideration stage. It does not merely require the Authority to register the existence of an application. It states that “the Authority shall review the reconsideration request and issue a decision including reasons within (40) forty Business Days from the date of receiving the application, and inform the applicant of its decision within (5) five Business Days from the date of issuing the decision”.
  3. The requirement that the decision must include reasons is important. It indicates that the reconsideration stage is not merely a portal formality. It is a statutory decision-making stage. Where the taxpayer has invoked a statutory extension mechanism, the reasons for accepting or refusing that mechanism are not external to the reconsideration process. They are part of the legal context in which the FTA decides whether the reconsideration should be admitted.
  4. The Committee’s jurisdiction is then set out in Article 31. It provides that the Committee has jurisdiction to:
    1. “Decide in respect of objections submitted regarding the Authority’s decisions on reconsiderations requests” and 
    2. “Decide in respect of reconsideration requests submitted to the Authority where the Authority has not made a decision on them according to the provisions of this Decree-Law”.
  1. This wording is not confined to FTA decisions which determine the substantive tax merits. It refers to the Authority’s decisions on reconsideration requests. A decision rejecting a reconsideration request on limitation is still, textually and procedurally, a decision in respect of a reconsideration request. It may be a defective decision. It may be a decision which the taxpayer says should be set aside. But it remains the relevant FTA decision for the purposes of the objection route.
  2. Article 32 then governs the submission of objections and the cases of non-acceptance. Clause (1) states that “an objection to the Authority’s decision in respect of a reconsideration request shall be submitted within (40) forty Business Days from the date of being notified of the Authority’s decision”. Article 32(2) is equally important because it states when an objection submitted to the Committee shall not be accepted. It provides that an objection shall not be accepted:

“a. If a reconsideration request has not been previously submitted to the Authority.

b. If the Tax in connection with the objection has not been paid in full.

c. If the objection is not submitted within the period specified in Clause 1 of this Article.”

This is a strong textual point. Article 32(2) does not say that an objection is inadmissible merely because the FTA rejected the reconsideration request on limitation. It does not say that the reconsideration must have been accepted by the FTA for substantive consideration. Nor does it say that the FTA must have decided the substantive merits before the Committee can be approached. The statutory precondition is that a reconsideration request has previously been submitted to the Authority, and that there is an FTA decision in respect of that reconsideration request against which the objection is filed within the Article 32 period.

  1. It follows that a limitation-based reconsideration decision should not be treated, merely by virtue of its subject matter, as falling outside Article 32. On the contrary, it is the natural object of an Article 32 objection. The taxpayer is not asking the Committee to pretend that the reconsideration deadline was never missed. The taxpayer is asking the Committee to determine whether the FTA lawfully dealt with the reconsideration request and the accompanying extension application.

Where Article 35 enters the analysis

  1. Article 35 introduces the statutory mechanism for extension of certain procedural deadlines. Article 35(2), which is central for present purposes, provides that “the Authority or the Committee, as the case may be, may at a request of a Person for any of the reasons specified in the Executive Regulation grant that Person an extension of any of the periods specified in … Clause 1 of Article 29 … of this Decree-Law”.  The reconsideration deadline in Article 29(1) is therefore expressly capable of extension. This is not a purely equitable or discretionary indulgence outside the statutory framework. It is a power contemplated by the  Law itself, to be exercised for reasons specified in the Executive Regulation.
  2. The relevant Executive Regulation is Article 25 of Cabinet Decision No. 74 of 2023. Article 25(3) states that “the Authority may, at the request of the Persons concerned, extend the deadline for accepting the submission of a Tax assessment review request or a reconsideration request, in the cases deemed appropriate by the Authority”. Article 25(5) then specifies what the extension request must contain “… the request must be submitted including justifications for extension and reasons related to the review, reconsideration or objection”.
  3. Accordingly, the taxpayer is not merely asking the FTA to overlook a delay. The taxpayer is invoking an express statutory and regulatory mechanism. Once that mechanism is invoked, the Authority must at least engage with it. A decision which treats the reconsideration request as late, but says nothing meaningful about the extension request or the reasons advanced for it, is difficult to characterize as a reasoned exercise of the extension jurisdiction.
  4. The difficulty arises because Article 35(3) contains a finality rule. It provides that “a decision by the Authority or Committee, refusing the request for extension made under Clause 2 of this Article pursuant to Article 32 or 36 of this Decree-Law, shall be final and not subject to an objection or appeal, as the case may be”. This is the provision around which the procedural controversy turns. The FTA may argue that, once it rejects the reconsideration request as late, Article 35(3) makes the matter final and prevents the taxpayer from asking the Committee to look behind the limitation conclusion. 
  5. In our view, that reading is too broad. It collapses three different legal acts into one: 
    1. a rejection of the reconsideration request on limitation; 
    2. a rejection of the extension request; and 
    3. a proper, reasoned exercise of the extension jurisdiction. 

But they are not the same.

“Pursuant to Article 32 or Article 36”: what does this phrase do?

  1. The words “pursuant to Article 32 or 36” in Article 35(3) require careful treatment. They should not be read as identifying Article 32 or Article 36 as the substantive source of the FTA’s power to refuse an extension request. That reading would be strained. Article 32 concerns objections before the Committee and the cases in which an objection is not accepted. Article 36 concerns appeals before the competent court. Neither provision sets out the substantive grounds or criteria by reference to which an extension request is to be accepted or refused.
  2. The source of the extension power is Article 35(2). The procedural mechanism for extension of a late reconsideration request is then found in Article 25(3) and Article 25(5) of the Executive Regulation. It follows that the words “pursuant to Article 32 or 36” should not be understood as qualifying the preceding phrase referring to a decision by the FTA or the Committee refusing the extension request. If they did, Article 32 or Article 36 would have to be treated as the legal basis for the refusal itself, which they are not.
  3. The better reading is that the words “pursuant to Article 32 or 36” qualify the procedural consequence which follows from the refusal, namely that the decision “shall be final and not subject to an objection or appeal”. On this reading, Article 35(3) does not prescribe the substantive basis for refusing an extension request. It identifies the procedural route in which the finality rule operates: objection before the Committee under Article 32, or appeal before the competent court under Article 36.
  4. This also gives proper effect to the closing words “as the case may be”. Where the FTA has properly refused an extension request, Article 35(3) may prevent a separate objection against that refusal under Article 32. Where the Committee has properly refused an extension request, Article 35(3) may prevent a separate appeal against that refusal under Article 36. The provision therefore matches the relevant authority with the relevant procedural route: the FTA with objection, and the Committee with appeal.
  5. What Article 35(3) should not be taken to do is transform every bare FTA limitation rejection into an unreviewable decision. Such a reading would treat the provision as if it deprived the Committee of competence whenever the FTA refuses to admit a reconsideration request for lateness. The provision does not say that. It attaches finality to a decision refusing an extension request. The first question is therefore whether there has in fact been a genuine decision on the extension request, in the legally relevant sense: that is, whether the Authority has:
    1. considered the request, 
    2. applied the relevant statutory framework, and 
    3. refused it for reasons capable of being understood.

Finality attaches to an exercised power, not to silence

  1. The distinction between a decision and silence is not merely semantic. A finality clause presupposes that the competent authority has exercised the relevant statutory power. It may protect the result of that exercise from a further procedural challenge. It should not be used to validate the absence of such exercise.
  2. In the present context, the relevant power is the power to grant or refuse an extension under Article 35(2), read with the Executive Regulation. A proper refusal would require the Authority to:
    1. recognize the extension request, 
    2. identify the applicable framework, 
    3. consider the reasons advanced, and 
    4. explain why the statutory or regulatory grounds for extension are not satisfied. 

It does not follow that the explanation must be lengthy. But it must be recognizable as an exercise of the extension jurisdiction.

  1. By contrast, a decision which merely states that the reconsideration request was filed after 40 business days, without addressing the extension request, is something different. It is a limitation rejection. It may also imply that the FTA did not accept the extension. But implication is not the same as a reasoned refusal of an extension application, particularly where Article 29(2) requires the FTA to issue a decision “including reasons” and Article 25(5) the Executive Regulation requires the taxpayer to submit justifications for the extension.
  2. This distinction is necessary to preserve the practical effect of the extension regime. If the FTA could defeat TDRC review simply by ignoring the extension grounds and issuing a standard limitation rejection, the taxpayer’s statutory right to request an extension would become largely illusory. The law would allow the taxpayer to submit justifications, but the Authority could avoid the legal consequences of that request by silence. Such an interpretation would give the finality rule a scope wider than its apparent function and would undermine the mechanism which Article 35(2) of the Law and Article 25 of the Executive Regulation were designed to create.

The Article 32 admissibility point

  1. There is a separate, and in practice equally important, Article 32 point. Article 32(2) contains the cases of non-acceptance of an objection before the Committee. As quoted above, the listed cases are: 
    1. no prior reconsideration request; 
    2. non-payment of the tax in connection with the objection; or 
    3. late filing of the objection itself. 

A limitation-based reconsideration decision is not one of those cases.

  1. This omission should not be treated as accidental. Article 32 is the provision which defines access to the Committee. If the legislator intended to say that the Committee may only consider objections where the FTA admitted the reconsideration request for substantive review, it could have said so. It did not. Instead, the requirement is that a reconsideration request has previously been submitted to the Authority.
  2. This reading is reinforced by Article 33(1), which sets forth that “the Committee shall review the objection submitted to it and make a decision within (20) twenty Business Days from the receipt of the objection”. The Committee’s task is therefore not limited to rubber-stamping the FTA’s procedural conclusion. Once the Article 32 conditions are satisfied, the objection is before the Committee. Where the impugned FTA decision is itself a limitation rejection, the legality of that limitation rejection is the very matter which the Committee is being asked to examine.
  3. Article 36 also supports this procedural architecture. It allows the FTA or the Person to appeal the Committee’s decision before the competent court within 40 business days in specified cases, and Article 36(2)(a) then refers back to Article 32 making a case inadmissable where there is an “existence of a case of non-acceptance of an objection by the Committee, as mentioned in Clause 2 of Article 32”. This confirms the importance of Article 32(2) as the gatekeeping provision. It is not appropriate to add a further non-acceptance ground which Article 32(2) itself does not contain.

What the Committee should be asked to review

  1. The correct framing is therefore not that the taxpayer missed the reconsideration deadline and then asks the Committee to disregard that missed deadline. That framing would be vulnerable, because it understates the statutory extension mechanism and overstates the taxpayer’s request. The more accurate framing is this: 
    1. The taxpayer submitted a reconsideration request together with an extension request. 
    2. The FTA issued a decision rejecting the reconsideration on limitation. 
    3. The taxpayer then objects to that FTA decision within the Article 32 period and asks the Committee to determine whether the FTA lawfully dealt with the reconsideration request and the extension application.
  2. On that framing, the limitation rejection is not a procedural obstacle to the Committee’s jurisdiction. It is the impugned decision. The Committee is not being asked to create a new reconsideration route outside the statute. It is being asked to exercise its statutory jurisdiction over an FTA decision in respect of a reconsideration request and to decide whether that decision can stand.

Why Article 35(3) should not be over-read

  1. Article 35(3) performs a sensible function if it is read in this limited way. It prevents an endless chain of separate disputes about extension refusals. Where the FTA or the Committee has properly considered an extension request and refused it, the law may make that refusal final in the relevant procedural route. This serves legal certainty and prevents procedural litigation from multiplying indefinitely.
  2. However, the provision should not be expanded beyond that function. It should not be read as saying that any FTA limitation rejection, however bare, unreasoned, or detached from the extension grounds actually submitted, is automatically immune from Committee review. Such a reading would produce an uneasy statutory result. Article 29(2) requires a reconsideration decision “including reasons”. Article 25(5) of the Executive Regulation requires the taxpayer’s extension request to include justifications. Article 31 gives the Committee jurisdiction over objections against FTA decisions on reconsideration requests. Article 32(2) identifies the cases where objections shall not be accepted. Yet, on the broad reading of Article 35(3), the FTA could bypass that framework simply by issuing a non-speaking limitation rejection.
  3. That reading is not impossible as a litigation position. But it is not the better systemic reading. The better reading is that Article 35(3) protects a proper extension-refusal decision from a separate objection or appeal. It does not prevent the Committee from examining whether the FTA in fact exercised the extension jurisdiction in the first place.

Practical conclusion

  1. In practice, where the FTA rejects a reconsideration request on limitation notwithstanding that an extension request was submitted, the taxpayer’s objection should be framed with precision. It should not merely assert that the Committee should ignore the missed reconsideration deadline. It should demonstrate the procedural bridge from the FTA decision to the Committee’s jurisdiction.
  2. The objection should therefore make clear that:
    1. the reconsideration request was submitted to the FTA;
    2. the FTA issued a decision in respect of that reconsideration request;
    3. the objection to the Committee is filed within 40 business days from notification of that FTA decision;
    4. the Article 32 admissibility conditions are satisfied;
    5. the FTA’s limitation rejection is the decision under challenge; and
    6. Article 35(3) does not bar review where the FTA did not issue a duly reasoned refusal of the extension request, but failed to exercise the extension jurisdiction in substance.
  3. The Committee may still disagree. The argument is not risk-free. Article 35(3) is capable of being invoked by the FTA as a finality provision, and a conservative decision-maker may be attracted by that submission. Nevertheless, in our view, the more coherent reading is that Article 35(3) should not become a procedural trap which makes the FTA’s failure to consider an extension request unreviewable. It should remain what it appears to be: a finality rule for proper extension-refusal decisions, not a shield for bare limitation rejections.

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. 

The same reservation applies to the judicial issues addressed in this article. This study has not been commissioned, authorised, or endorsed by the Ministry of Justice, the Federal Supreme Court, or any other judicial authority in the UAE. It is not intended to convey, and should not be understood as conveying, any official position of those authorities. Nor does it purport to suggest that the interpretations, conclusions, or proposals set out in it are binding on the courts or must necessarily be adopted in judicial practice.

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.