A Guide to Excise Tax Reporting Requirements in the UAE Designated Zones
Warehouse operators in designated zones in the UAE are required to comply with a new set of reporting requirements introduced by the Federal Tax Authority (FTA). Warehouse keepers of one or more designated zones need to declare their opening stocks as of January 1st 2021. For reporting the opening stocks in compliance with the FTA regulations, the warehouse keepers in the designated zones require the assistance of reputed tax consultants in Dubai. Since ensuring Excise Tax Compliance in the UAE is imperative, here is a detailed guide on the processes to be undertaken and requirements to be met:
What is the New Opening Stock reporting Requirement?
By introducing the opening stock reporting obligation, the FTA has implemented additional controls on the movement of stock to and from Designated Zones. The Authority has made available a new Opening Stock Declaration (EX204) on its portal through which the warehouse operators can disclose the opening stock held in a Designated Zone. The warehouse keepers will be allowed only to move the stock up to the quantity that has been declared previously.
Steps to Declare Opening Stock of Excisable Goods
As per the FTA norms, tax registrant warehouse keepers operating outside of the Designated Zones are not required to declare the Opening Stocks. Those tax registrants who come within the scope of the new reporting requirement should perform the following steps to ensure compliance. The process could be done quickly with the assistance of tax agents in Dubai:
1. Appointment of External Auditors
Warehouse keepers of one or more Designated Zones need to appoint a certified external auditor in the first step. The external auditor will audit the Opening Stock as of January 1st in each Designated Zone per the tax registrant. The tax registrants can consult with tax consultancy firms in Dubai to hire external auditors for this purpose.
2. Filling up the Declaration Form
Once the opening stock audit is completed, the warehouse keepers need to fill the Opening Stock Declaration Form. The FTA mandates the operators to submit one Declaration per Excise Tax Registrant per designated zone. Registered tax agents in Dubai will assist in submitting the Declaration Form in compliance with the FTA regulations.
3. Approval for Opening Stock Declaration
Each Excise Tax Registrant has to approve the Opening Stock Declaration once the warehouse keeper has submitted it. The tax registrants who hold goods in multiple Designated Zones should approve multiple declarations from the respective Warehouse Keeper of the Zone. Hiring the best Excise Tax Agents in Dubai is the easiest way to ensure compliance with the FTA norms.
Essential Aspects to Note During Declaration
The Excise Tax Registrants and Warehouse Keepers need to be aware of the following aspects while dealing with the Opening Stock Declarations:
- Only a single Opening Stock Declaration can be submitted per Excise Tax Registrant per Designated Zone by a Warehouse keeper
- The approval of the Excise Tax Registrant who owns the goods is mandatory for the submission of the Opening Stock Declaration
- No amendment is possible on the Delcation once it has been submitted and subsequently approved by the UAE Excise Tax Registrant
- All the figures included in the Opening Stock Declaration must be verified by an external auditor in the UAE, and the auditor’s report should be attached along with the submission
- The Opening Stock Declaration template is available in excel format, and the warehouse keepers can start using it
- The Opening Stock declarations can’t be submitted after January 31st 2021
Purpose of New Reporting Requirements
The FTA has implemented the Opening Stock Declaration Requirement for warehouse keepers in the Designated Zones to fulfil the following objectives:
- As a supportive mechanism for the enforcement activity aimed at minimising illicit trading in excisable goods
- To give more power for the FTA in controlling the movement of Excisable Goods in the UAE Designated Zones
- To meet the compliance standards applicable to Excise Tax in the UAE
Consequences of Not Submitting Declaration
If the warehouse keepers fail to submit the Opening Stock Declaration as per the deadline, the FTA will set the stock held in the Designated Zones to Zero. The Authority will also restrict them to move the stock out of the Designated Zone. The FTA will review the Opening Stock Declarations, but any variances will attract administrative penalties or Excise Goods being considered as released for consumption.
How can Tax Agents in Dubai Help in Ensuring Compliance?
The FTA has launched new reporting requirements for excisable goods in designated zones to minimise illicit trading in excisable goods. The new reporting requirement is also meant to give more control for FTA over the excisable goods in Designated Zones. As per the new norms, warehouse keeper in designated zones must declare the opening stocks for which tax agents in Dubai such as Jitendra Chartered Accountants (JCA) assist with robust advisory. JCA is one of the most experienced tax consultancy firms in Dubai with a team of highly qualified auditors and tax agents. JCA’s auditors in Dubai assist in auditing the opening stock and submitting the report in compliance with the standards. JCA also advise the clients on the A-Z process of submitting the Opening Stock Declaration.