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Excise Tax Refund

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Get Excise Tax Refund In UAE

Businesses operating in the United Arab Emirates are always concerned to comply with the tax laws of the state. In the UAE, there are two main types of taxes that must be collected to meet the requirements of the Federal Tax Authority. The first one is VAT, a value-added tax imposed at each point in the supply chain, while on the other hand, the excise tax only applies during the manufacturing and importing of goods. If a company deals in excisable goods they need to efficiently manage its excise tax return filing as well as an excise tax refund in UAE after registration. Here we will discuss in detail the process of obtaining an excise refund amount from the UAE regulatory authorities.

What Is Excise Tax Refund?

An excise tax refund applies when the deductible tax is greater than the excise tax payable in the return filing. The  Federal Tax Authority is responsible for paying back the excess amount of tax under the provision of the Excise Decree-law. The registered business entity can claim the excise refund by submitting an application to the FTA.

Reason For Claiming Refund 

The main reason behind the excise repayment is to provide financial relief to manufacturers, importers, and stockpilers. They can apply the excess refundable tax against their excise tax liability payable to the FTA in future tax periods until the excess refundable tax is utilized. The claim is required to obtain the excess refundable tax and balance your tax calculations. It totally affects your company’s revenue and growth in the coming years.

When To Request Excise Refundable From FTA?

Under Federal Law No. (7) of 2017 on Tax Procedures, the registrants can request an excise tax refund from FTA as long as the following conditions are met:

  • When the excise tax has been previously paid on an excisable item, which also turned into another new excise good and again excise tax is due on it. E.g. Both raw tobacco and cigarettes manufactured with tobacco will be subject to excise taxes
  • When an excise good has already been taxed by the UAE and exported outside of the country

Timeframes For Excise Refund

The time period of verifying and accepting the refund request is usually time-consuming due to the high charges of the excisable goods. The FTA will repay the excess refundable tax to the taxable person in almost 2 calendar months by the submission of the claim. The Federal Tax Authority has also the right to conduct a tax audit to verify your case within 21 calendar days of auditing. In some situations, the FTA may refund the excess refundable amount in less than two tax periods. The first one is when the excise tax registration is canceled. The second is when the FTA is satisfied that the Taxable Person is likely to pursue taxable activities in the future, but there is a likelihood that an excess refundable tax will result for at least a year.

How To Claim An Excise Tax Refund In UAE?

The excise tax refund in UAE is completed online on the official website of the FTA. Let’s discuss some essential steps to apply for an excise refund:

Step 1: Log In To Your FTA Portal

First of all, the applicant needs to log in to the e-Services Portal of the FTA by using their registered email address and password. Once that is done, they need to click on the “Excise Tax” tab.

Step 2: Access to Refund Form 

To access the Refund form, the applicant or representative hits the ‘Excise Tax Returns and Excise Tax Refunds’ tab. Then scroll down below and open the ‘EX301 – Excise Tax Refunds’ form.

Step 3: Add Information In Fields

The real process begins here where you fill out all the mandatory fields and attach the required documents. After completing the form, click on the ‘Save and Review’ button and confirm the details.

Step 4: Submit The Application

Before submitting the application, it is essential to review all the details. If the entered information is accurate then click on the ‘Submit’ button. Now your request is transferred to the federal authority.

Step 5: Verify Your Balance 

Once you receive an email confirming your refund, you can access the ‘My Payment’ section under the ‘Transaction History’ section to view your balance.

However, the process is not as simple as it seems. The applicants have to submit the refund applications on time and accurately. Business entities can be penalized for either late or incorrect tax refund submissions.

How Come Taxpayers have Trouble Getting FTA Refunds?

The taxpayers often get confused while paying the tax and end up paying more than required. They have a lack of understanding of the FTA provisions and complex tax regimes in the United Arab Emirates. Therefore, the entities face non-compliance issues and attract heavy fines and penalties from the authorities. The process is time-consuming and difficult for a taxpayer. It is recommended for tax persons to outsource professional tax consultants in Dubai, which will prevent your accounts from FTA sanctions.

What Does BestaxCA Do For You?

At BestaxCA, tax experts can assist you in every step of the Excise Tax Refund process under the Decree-law 2017. Our tax consultants will do an in-depth analysis of your business and financial transactions. We calculate your excess amount of tax before claiming to the FTA to avoid unnecessary mistakes. Our team reviews and prepares all your required information and documents. We have a vast knowledge of UAE tax laws to provide an expert opinion on excise tax refunds in the UAE. All follow-up queries are handled by us, and we stay with you until you receive your excise refunds. Don’t hesitate to reach out to us!

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