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VAT Update

Federal Tax Authority Calls on Registered Businesses to File Excise Tax Returns and Pay Dues before November 15
(November 11, 2017)

Businesses that miss the deadline risk being subject to the penalties stipulated in Cabinet Decision No. (40) of 2017


 

Abu Dhabi, November 11, 2017 - The Federal Tax Authority (FTA) has called upon businesses registered for Excise Tax to file their October returns before the deadline on November 15, 2017, in order to avoid the penalties stipulated in Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of the Tax Laws in the UAE.

The Authority has stressed the necessity of filing returns regularly before the 15th day of every month for the previous Tax period. All businesses registered for Excise Tax must pay the due tax on excisable goods (50% on carbonated drinks, 100% on tobacco products and energy drinks).

His Excellency Khalid Al Bustani, Director-General of the Federal Tax Authority, said: "Since the beginning of November, businesses registered for Excise Tax have been consistently complying with their requirements and deadlines, filing their tax returns on time. We urge those who haven't done so yet to file their returns before the deadline of November 15, 2017, and settle the payable tax stated in the submitted Excise Tax Return, in order to fulfil their obligations according to the tax procedures in the UAE."

Businesses can file their returns online and free of charge through the eServices portal on the FTA website, by:

  • Logging into the eServices account
  • Selecting the "Excise Tax Returns and Declarations" page.
  • Selecting the "Tax returns - Excise Tax" tab.
  • Clicking on the "New Tax Return" button.
  • Review the information and ensure any data outstanding is completed and then submitting the return.

The Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of the Tax Laws in the UAE applies to all the listed violations in the Federal Law No. (7) of 2017 on Tax Procedures and Federal Decree-Law No. (7) of 2017 on Excise Tax. According to this, the failure of the Registrant to submit the Tax Return within the timeframe specified in the Tax Law will subject them to an automatic AED1,000 penalty in the first time and AED2,000 in case of repetition within 24 months.

The Cabinet Decision also states that if a Taxable Person fails to settle the Payable Tax stated in the submitted Tax Return or Tax Assessment he/she was notified of, within the timeframe specified in the Tax Law, he will be obligated to pay a late payment penalty of 2% of the unpaid tax – due immediately once the payment of Payable Tax is late; 4%, due on the seventh day following the deadline for payment; and a 1% daily penalty will be charged on any amount that is still unpaid one calendar month following the deadline for payment, with the upper ceiling being 300%.

Businesses are also required to ensure the accuracy of the data being submitted, as the submittal of an incorrect Tax Return by the Registrant can incur a fixed penalty of AED3,000 plus a percentage-based penalty of up to 50% of the amount unpaid.

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