Business Bureau, Gulf Today

The Federal Tax Authority (FTA) has launched a new electronic system for registering Excise Goods as part of its plans to continuously develop the tax system as a whole, and Excise Tax procedures, in particular.

In a press statement issued on Saturday, the Authority explained that the new system offers accurate and transparent procedures for registering excise goods with clear guidelines and standards in addition to the new reporting requirements related to excise tax returns and declarations.

The launch is aligned with the UAE leadership’s directives to enhance the country’s global competitiveness through continuous improvement of government services and ensuring accurate and transparent processes.

The Federal Tax Authority called on all businesses dealing with Excise goods to follow the new process of registering Excise Goods and ensure all required documents are readily available when submitting the registration request for the goods. The requirements clarified in the new guides include products details, ingredients, marketing information including images and videos, lab tests in some cases, and the retail price of the product based on the UAE retailers or in the relevant country in case it is not sold in the UAE.

In relation to the new reporting requirements of the excise tax, The Authority urged the excise taxable persons to comply with the new declarations and tax return forms and reporting requirements including import, produce, release from designated zones, and local purchase scenarios, which ensures increased transparency and accuracy. Additionally, The Authority pointed to the new manuals and guides it launched to raise awareness among taxpayers and offer them instructions on how to register excise goods in the new system, and comply with the new reporting requirements and forms in the excise tax system. The FTA invited businesses subject to Excise Tax to make use of these manuals to educate their staff about the new system, as well as the procedures for implementing Excise Tax in general.

Any Person who produces or imports an Excise Good to be sold in local markets is subject to Excise Tax, as is any Person who stockpiles said goods or releases them from a Designated Area, the FTA asserted, urging all relevant businesses to take the initiative and register their Excise Goods in the new system, as per the terms and conditions stipulated in the Cabinet Decision on Excise Goods, which specifies the tax rates they are subject to and outlines the method used to calculate Excise Prices.

The Federal Tax Authority asserted that there is no threshold for Excise Tax, meaning that any business with activities involving Excise Goods is required to go ahead and register in the new system, calculate its tax amounts, and refer to the FTA website for information and manuals that outline the required procedures for producers and importers of Excise Goods, and for excise goods stored in Designated Zones.

FTA is also ramping up its efforts in preparation to implement the second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, where it will be expanded to cover waterpipe tobacco (known in Arabic as ‘Mu’assel’) and electrically heated cigarettes as of November 1, 2019.

‘Digital Tax Stamps’ will be made available for purchase by producers and importers of waterpipe tobacco and electrically heated cigarettes, the Authority revealed, as it held its second awareness workshop in Dubai to introduce them to the Scheme’s procedures and objectives, as well as the timeline for the second phase. The workshop was led by FTA experts and representatives from De La Rue, the company commissioned by the Authority to operate the system.

The Federal Tax Authority asserted that the Scheme was launched to support its efforts to collect taxes, combat tax evasion, and protect consumers from commercial fraud. The FTA went on to note that these preparations follow the successful implementation of the Scheme’s first phase, where the sale and possession of any cigarette packets not bearing the ‘Digital Tax Stamps’ was prohibited across local markets as of Thursday, August 1, 2019. In a press statement issued recently, FTA Director General Khalid Ali Al Bustani said: “This workshop is part of the Authority’s plan to raise tax awareness among taxable businesses, maintain constant communication with professionals working across all economic activities, and keep them in the loop with regards to the latest developments in tax procedures. These workshops allow us to listen to their opinions and suggestions, and address any obstacles they may be facing to ensure a smooth implementation of tax laws.”