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Excise Tax Penalty Reconsideration

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Excise Tax Penalty Reconsideration In UAE

In the United Arab Emirates, an excise tax is only levied on specific goods manufactured, imported, and stocked. The Federal Tax Authority oversees the implementation of an excise tax based on the current tax procedure law.  The taxable entities who fail to comply with the UAE excise tax laws and regulations are penalized. However, FTA provides a chance to apply for excise tax penalty reconsideration when the taxpayer is not satisfied with the authority’s decision. It is a tricky process, so our tax experts in Dubai can assist you in the whole procedure of reconsideration as per the FTA guidelines.

Excise Significance In Emirates

Excise tax is mandatory in all the Emirates of UAE as it aims to reduce the harmful effects of particular excise goods. An organization dealing in carbonated drinks, alcohol, e-cigarettes, petroleum products, etc must implement excise tax to correctly trade excisable goods. It will also reduce the chances of entities being subject to FTA administrative penalties.

The UAE regulatory authorities can assess the excise tax records of registered entities. If the company does not fulfill the FTA requirements within the deadline and has underpaid excise tax, then the authorities can levy heavy fines. Due to this, every taxable business in UAE pays attention to the excise tax.

Excise Tax Penalties In UAE

Under the Federal Decree-Law No. (7) of 2017 on the excise tax, the FTA imposes administrative penalties on the taxpayers for violating tax laws and regulations. Below mentioned scenarios can be the reason for regulatory sanctions:

  • If a taxable person fails to display prices inclusive of tax, the Administrative Penalty of AED 15,000 is levied
  • When the taxpayer fails to comply with the conditions related to transferring the Excise Goods from one Designated Zone to another and doesn’t follow the legal procedure of manufacturing and storing excisable products. A penalty of AED (50,000) or higher will be imposed. (50 percent of the tax, if any, applicable to the goods, as a result of the violation)
  • If a Taxable Person fails to provide price lists to the FTA for the excise Goods produced, imported, or stockpiled thereon. The fine is AED 5,000 for the first time and 20,000 in the case of repetition
  • If you fail to register for excise duties within the deadline, you will be subject to a penalty of AED 20,000

How Do You Solve Excise Non-Compliance?

In the case of excise non-compliance, as per the federal Decree-law no 7, the taxable person may review the authority’s decision. The entity can waive off non-compliance fines by submitting a UAE excise tax reconsideration form to the FTA, if applicable, however, it needs comprehensive knowledge of tax laws and expertise in the procedure. Our tax consultants can solve all your difficulties related to the excise tax in UAE  as per the regulatory requirements.

How To Submit UAE Excise Penalty Reconsideration?

The UAE excise penalty reconsideration form is only available on the official website of the Federal Tax Authority. The applicant has to log in to his/her e-service account by the registered email address and password. The form consists of pre-populated fields which require updated and correct information along with the supporting documents. The registrant must clarify authorities about the excise tax penalty disagreement (why you are unsatisfied with FTA’s decision). Also, notify the alternative actions that should be taken in your case. One of the most essential things is the application and all evidence should be in Arabic rather than the English language as per FTA guidelines. You can outsource tax experts in Dubai who assist national or international clients in reviewing administrative penalties with the least probability of error.

Requirements For Reconsideration Application

In order to submit the UAE excise tax reconsideration form, the following documents and information are needed:

  • Passport copy of Authorized Signatory
  • Authorized signatory Emirates ID
  • Authorized Power of Attorney (POA) or Memorandum of Association (MOA)
  • A formal case letter along with legal references

How FTA Reduces Tax Violation Fines?

The Federal Tax Authority strives to create a secure and friendly business environment for UAE residents and foreigners. FTA does not always impose non-compliance penalties, but also provides additional ways for businesses to avoid them. As we discussed above the excise tax penalty reconsideration application helps several taxpayers in reducing sanctions. However, FTA recently announced a big relief for taxpayers, the redetermination of administrative penalties in UAE for reducing their fines. In this newly amended provision, taxable persons whose due fines are not settled until 31 December 2021 could redetermine them until 31 December 2022.

Get Assistance For Excise Penalty Reconsideration

Over the years, Bestax Chartered Accountants and tax consultants have assisted individuals and corporations in tax compliance. We are a team of the leading accounting and consulting firms in the heart of the UAE, Dubai. Our dedicated tax advisors help clients in excise tax registration / de-registration, excise return filing, excise refund, excise implementation, and excise compliance services in all of the Emirates. We guarantee that your business will not be penalized by regulatory authorities once you hire us to handle your excise taxes in UAE.

In the case of a prior FTA penalty, you can hire our excise advisors that provide complete guidance on how to submit your excise tax penalty reconsideration form in UAE as per regulatory guidelines. Compliance failures are our main concern, as well as ensuring that our clients are always protected from the potential risks. Reach out to us today!

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