FTA recently added a new option of Clearance Certificate on FTA Portal which will be helpful for those businesses who are looking for Merger, Acquisition, Bankruptcy or liquidation. VAT clearance certificate (CC) is available on the basis of License number, for Tax groups CC will be available for all the members of the group on Individual basis.
Till now, Consultants are relying on tax returns and the outstanding as per the FTA portal under the payment tabs. The service is available only for the tax registrants (possibly for both VAT & Excise Tax) and can be found on the registrant’s e-service page. Generally, a Tax Clearance Certificate confirms that a registered person complies with government tax requirements. However, the use of this clearance certificate is rather limited to the following reasons.
Clearance Certificate Reasons:
- Change Ownership
- Business Closing
- Below Voluntary Threshold
- Below Mandatory Threshold
At present the purpose of this certificate is not clearly laid out it could suggest that once a taxpayer is de-registered, he could apply for this certificate to prove that he has no tax obligations pending with the FTA.
Due to COVID- 19, many companies are going into liquidation; VAT clearance certificate will be the compulsory requirement for them for liquidation purpose. There will not be any service charge for the same and Horizon Biz Consultancy will take 20 business days to process the same.
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