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Excise Tax Deregistration

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Excise Tax Deregistration In UAE

The excise tax was announced in October 2017 to control the harmful effects of specific goods or items produced in the United Arab Emirates. The products include energy and sweetened drinks, alcohol and cigarette consumption, and many others that have a negative influence on human health and surroundings. That’s the reason the state government made it compulsory for businesses to register for excise tax in UAE. However, if the business is no longer dealing in excisable goods then it is also mandatory to apply for excise deregistration in UAE.

What Is Excise Tax De-Registration?

An excise tax deregistration is an online form that is submitted under the Federal Tax Authority (FTA) online portal. It is requested when the business is no more liable for the excisable goods and wants to cancel their excise tax registration in UAE. There is a proper way of excise deregistration in UAE as provided in the tax law.

In Which Situations, You Must Request Excise Deregistration? 

There are certain circumstances in which the registered person should request excise deregistration in UAE. The tax authority stated conditions clearly to discontinue the registration for excise tax such as:

  • When the registrant individual stops taxable activities such as manufacturing, importing, and stockpiling of excisable goods, and isn’t expecting to deal with these items over the next 12-month period (1 year). Then the entity must submit deregistration for excise tax in the United Arab Emirates.
  • Under the Excise Tax Laws, the local authorities have a right to deem compulsory excise deregistration in UAE.
  • When an excise registrant requests deregistration, the registrant must have canceled tax warehouse licenses that are held prior to the request.

Time Frame For De-registration

According to the rules stated in the Decree-law, the registrant must request authorities within 30 days of the occurrence of any of the above-mentioned situations. The tax authority will respond to the excise deregistration application within 20 business days of receiving the request. The taxable entity must determine the dates for de-registration otherwise they will be penalized.

Procedures For Excise Tax Deregistration

The excise deregistration in UAE is the online process on the official portal of the Federal Tax Authority. The applicant must follow this step-by-step procedure:

Step 1. Fill Out The Deregistration Form

When a taxable person stops making excisable goods then the first step is to fill out the deregistration form available on the FTA website. First of all, the applicant reviews the pre-populated fields. You also need to specify the date from which the de-registration is needed for the business. All the information must be accurate and updated as per excise tax legislation in the United Arab Emirates.

Step 2. Attach Supporting Documents

After adding the details about the registrants you are also required to attach documents to prove your case. Just click on the ‘Choose Files’ to upload the supporting document along with the application.

Step 3. Confirm Signatory Declarations

Update the email credentials for the Authorized signatory. Validate and apply for all 4 Declarations of the Approved Signatory. Hit the ‘Submit’ button and then FTA makes its decision of approval and rejection of the deregistration application.

Step 4. Pre-Approval Of Application

In the event that your request for deregistration is accepted by the FTA, you will receive a letter stating “Pre-approval withdrawal”. Upon review of the application’s status, you will be sent an email and a text message inviting you to complete the pending liability charge.

Step 5. File The Final Tax Return 

The final tax return is also needed to be submitted where your form is approved, in 15 days at the end of the one calendar month. Final tax returns are those for the last Tax Period in which the Taxable Person is registered by the local authority. It starts from the 1st day of a calendar month and finishes on the stated date of deregistration pre-approved by the FTA.

Step 6. Settle Any Outstanding Liability 

In case, the excise deregistration in UAE was not approved due to the incomplete payment of outstanding liabilities. It means the registrant must settle tax payments or refund, depending upon the account balance of the company. You must clear your credit amount pending status with the Federal Tax Authority. Once the payment is settled, the request for deregistration of the excise tax will be processed.

Penalty On Late Excise Deregistering

The Federal Tax Authority is responsible for equitable tax collection and distribution in the UAE. Authorities impose a fine on a company that fails to notify FTA of its suspension of excisable goods activities. For late excise deregistration, the administrative penalty of AED 10,000 is levied by FTA. Our tax consultants will help you to file an application for deregistration within the specified deadline as stated in the Tax Law.

Why Do You Need A Consultant For Excise Deregistration?

The excise tax de-registration is a very complicated process because you have to go through hundreds of procedures to file your last tax return. The entities are under pressure while submitting applications as a minor mistake or delay can bring a hefty amount of fines by FTA. Therefore, it is advisable to outsource tax consultants to implement excise taxes in UAE as we will help you avoid any sanctions.

BestaxCA’s Excise Tax Specialists In Dubai  

The Bestax Chartered Accountants and tax consultants in Dubai are specialists in excise tax services as per the FTA standards. The qualified advisors have a wide experience in different major industries and that’s the reason they always provide effective tax solutions to companies. Our team will make all of your documents ready for excise deregistration in the UAE. Our aim is to reduce your burden and give you peace of mind by making your account tax compliant. If you want more information about our excise tax services, call us now!

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