Excise Tax Deregistration In UAE.
The excise duty was announced in October 2017 to control the harmful effects of certain goods or items produced in the United Arab Emirates. These products include energy and sweetened drinks, alcohol and cigarette consumption, as well as many other products that have a negative impact on human health and the environment. For this reason, the national government made it compulsory for companies to register for excise duty in the UAE. However, if a company is no longer in the business of excisable goods, it is also obligatory to apply for cancellation of the excise duty registration in the UAE.
What is deregistration?
De-registration for excise duty is an online form submitted via the Federal Tax Authority’s (FTA) online portal. It is requested when a company is no longer responsible for excisable goods and wishes to cancel its excise duty registration in the UAE. The cancellation of excise duty registration in the UAE is carried out in accordance with the tax law.
In which cases do you need to request the excise goods to be removed from the register?
There are certain circumstances in which a registered person must request cancellation of excise duty registration in the UAE. The tax authority has clearly stated the conditions for cancellation of excise duty registration, such as:
- If the registered person ceases taxable activities such as the manufacture, import, and storage of excisable goods and does not intend to deal in those goods for a further 12-month period (1 year). Then the person must file a cancellation of excise duty registration in the United Arab Emirates.
- Under the excise duty laws, the local authorities have the right to make the cancellation of excise duty registration in the UAE compulsory.
- If an applicant for excise duty registration requests cancellation of registration, the registrant must cancel the tax warehouse licenses held prior to the request.
The time limit for cancellation
In accordance with the provisions set out in the Legislative Decree, the registrant must apply to the authorities within 30 days of the occurrence of any of the above situations. The tax authority will reply to the request for cancellation of the excise duty registration within 20 working days of receipt of the request. The taxable person must fix the dates for cancellation of the registration, otherwise, he will be penalized.
Procedures for excise duty deregistration
De-registration of excise duties in the UAE is an online process via the official portal of the Federal Tax Authority. The applicant must follow this step-by-step procedure:
Step 1. Fill in the cancellation form
If the taxable person ceases to manufacture excisable goods, the first step is to complete the deregistration form available on the FTA website. First, the applicant checks the fields previously filled in. The date from which the company needs to be removed from the register must also be indicated. All information must be accurate and up to date in accordance with the excise legislation in the United Arab Emirates.
Step 2. Attach supporting documents
After attaching the details of the registrants, you must also attach documents to prove your claim. Simply click on ‘Choose Files’ to upload the supporting documents with your application.
Step 3. Validate the signatories’ declarations
Update the email credentials of the authorized signatory. Validate and submit the application for all 4 Authorized Signatory Declarations. Click the “Submit” button and the FTA will then make a decision to approve or deny the cancellation application.
Step 4: Pre-approval of the application
In the event that the FTA approves your application for cancellation, you will receive a letter stating “Withdrawal of Prior Approval”. After reviewing the status of your application, you will be sent an email and a text message asking you to complete the pending commitment fee.
Step 5. Submit your final tax return
Even if your form has been approved, you must submit your final tax return within 15 days at the end of one calendar month. Final tax returns are returns for the last tax period in which the municipality has registered the taxpayer. It starts from the 1st of the calendar month and ends on the date indicated when the FTA has previously approved deregistration.
Step 6. Settlement of any outstanding obligations
In case the cancellation of the registration of excise goods in the UAE was not approved due to incomplete settlement of outstanding obligations. This means that the registrant must make tax payments or repay taxes depending on the balance of the company’s account. You must clear the amount of the credit pending status with the Federal Tax Authority. Once the payment is settled, the request for cancellation of the excise tax registration will be processed.
Penalty for late excise duty deregistration
The Federal Tax Authority is responsible for the fair collection and distribution of taxes in the UAE. The authorities impose a penalty on a company that fails to inform the FTA of the suspension of excise goods. The FTA imposes an administrative penalty of AED 10 000 for late cancellation of the registration of excise goods. Our tax advisors will assist you in applying for cancellation of excise goods registration within the time limit as stipulated by the Tax Law.
Why do you need a consultant for the cancellation of excise duty registration?
De-registering excise duty is a very complicated process as you have to go through hundreds of procedures to file your last tax return. Legal entities are under pressure when applying, as the FTA can impose a large fine for a small error or delay. Therefore, it is advisable to outsource the implementation of excise duties in the UAE to tax consultants as we will help you avoid any penalties.
BestaxCA excise tax specialists in Dubai
Bestax certified accountants and tax consultants in Dubai are specialists in excise tax services in accordance with FTA standards. The qualified consultants have extensive experience in various major industries, which is why they always provide effective tax solutions for businesses. Our team will prepare all your documents for excise duty waiver in the UAE. Our aim is to reduce your burden and provide you peace of mind by making your account tax compliant. If you would like more information about our excise tax services, call us now!