Excise Tax Penalty Reconsideration In UAE

Excise Tax Penalty Reconsideration In UAE

In the United Arab Emirates, excise duty is levied only on certain goods that are manufactured, imported, and stored. The Federal Tax Authority supervises the application of excise duty on the basis of the current tax procedure law.  Taxpayers who do not comply with the UAE excise duty laws and regulations are penalized. However, the FTA provides for the possibility to apply for a review of the excise duty penalty if the taxpayer is not satisfied with the authority’s decision. This is a complex process, so our tax experts in Dubai can guide you through the review procedure in accordance with the FTA guidelines.

Importance of excise duty in the Emirates

Excise duty is compulsory in all Emirates of the UAE as it aims to reduce the harmful effects of certain excisable goods. An organization that sells carbonated beverages, alcohol, e-cigarettes, petroleum products, etc. must implement excise duty in order to properly market excisable goods. This will also reduce the likelihood of the entities being subject to FTA administrative penalties.

The UAE regulatory authorities can assess the excise duty records of registered companies. If a company has not complied with FTA requirements within the time limits and has underpaid excise duties, the authorities may impose heavy fines. Therefore, every taxable company in the UAE pays attention to excise duty.

Excise duty penalties in the UAE

Under Federal Decree-Law No. (7) Of 2017 on Excise Duty, the FTA imposes administrative penalties on taxpayers for violations of tax laws and regulations. Regulatory penalties may result from the following scenarios:

• If the taxpayer does not indicate the prices that include the tax, an administrative penalty of AED 15 000 is imposed.
• If the taxpayer fails to comply with the conditions related to the movement of excise goods from one designated zone to another and fails to comply with the legal procedures for the production and storage of excise goods. A fine of AED (50 000) or more is imposed. (50% of the tax, if any, applicable to the goods as a result of the offense).
• If the Taxable Person fails to submit price lists to the FTA for the excise goods manufactured, imported, or stockpiled therein. The fine is AED 5,000 the first time and AED 20,000 in case of repeated acts.
• If you fail to register as an excise taxpayer within the prescribed time limit, you will be fined AED 20 000.