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Excise tax law was introduced in the UAE in the year 2017. It is a form of indirect tax levied on specified goods. These specified goods are harmful to human health or our environment and are known as “Excise goods”. Additional tax in the form of Excise tax was levied in order to reduce the consumption of such goods. Also, such additional tax will increase the revenue of the government. The broad categories of such products are:
- Tobacco and tobacco products (100%)
- Energy drinks (100%)
- Carbonated drinks (50%)
Any business that deals in any of the above mentioned goods needs to get register under Excise tax UAE. There is no threshold limit for excise tax registration.
When to apply for Excise Tax De-registration
When a registered person stops in dealing with such goods or activities on which excise tax is applicable, then the business has to de-register.
- The business must be have submitted all tax returns and payment of Tax and penalties.
- Confirm and submit all the four Declaration by the Authorized Signatory(through the online portal dashboard).
- Letter of undertaken as a declaration that they will not involve in import,export, and release excise tax goods from designated zone.
- Once the FTA confirms acceptance of your de-registration application form,you will be notified by a message of “Deregistration Pre-Approval”.a
- The status of your de-registration in the dashboard will be changed to ‘Pre-
- You shall also be required to submit a final tax return which will be generated by the system in the “VAT returns” section. Pay the tax due.
- Once you complete the payment, go to the dashboard and click the De-
Register button against the Excise Tax box to complete the De-Registration
- If at the time of De-Registration you have a credit amount pending with
FTA, you will have to request for refund first. Once the refund has been
approved by FTA, FTA will process the De-Registration request.
Penalties (If not de-registered within time)
If the registered person doesn’t de-register within the prescribed time period as per the law i.e. 30 days from the date you are required to apply for deregistration, it will attract penalty from the Authority.
The failure of the Registrant will attract an administrative penalty of AED 10,000 as per Excise Tax Laws of UAE.