Excise Tax Penalty UAE
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The knowledge of Excise Tax in the UAE.
Excise tax is imposed on a certain commodity to decrease the use of a certain commodity because of its health or environmental environmental reasons. This tax is managed by the Federal Tax Authority (FTA) and it is imposed on tobacco, energy drinks, and carbonated drinks. Companies that deal with production, importation or hoarding of these products have to be registered excise tax payers and comply with rigorous compliance provisions.
Common Excise Tax Penalty UAE
- Late Registration
The non-registration of the excise tax within the period stated might lead to a fixed penalty. As an example, registration after late payments is fined AED 10,000. This penalty is applicable to businesses which start operations on which there is an excise tax without registration in the FTA in time.
- Late Return Filing
Late filing of excise taxes is penalty-attracting. First time late filing attracts a fixed penalty of AED 1,000 as stated by the FTA. Delays that follow may result in higher fines with penalties increasing as time goes by. Thus, a fee will be charged per day depending on the time of the delay.
- Excise tax late payment
Excise tax late penalty is very heavy. The FTA imposes or fines 2 percent of the outstanding tax on a daily basis only after the due date. In case the payment is not made within seven days, the fine would be raised by an extra 4 percent daily fee, but to a certain limit. This growing penalty regime can soon wipe out cash flow and put business solvency at risk.
- Improper Submission of Returns.
Making falsified excise tax return filing may result in penalties. Each time of inaccurate filing is subject to a set penalty of AED 500 according to the FTA. Nevertheless, the penalty can be exempted in case the error is corrected by the deadline. mof.gov.ae.
- Failure to Adhere to Excise Goods Regulations.
Companies have to follow certain rules related to the operations with the excise goods. The penalty that is likely to be issued in case of violations (not showing tax-inclusive prices or non-adherence to prescribed zone practices) may be between AED 15,000 and AED 50,000, depending on the case and the repetition.
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Plans to Prevent Excise Tax penalty UAE
To reduce the risk of paying penalties, companies may follow the following options:
- Registering in Time: Before you begin any form of operation dealing with excise products, you must have your business registered to collect excise tax.
- Proper record-Keeping: Keep various and precise records of all the transactions related to the excise goods to enable the proper filing of tax returns.
- Frequent Training: Train the staff frequently on regulation of excise tax and compliance requirements.
- Adopt Technology: Have automated solutions to monitor the movement of excise goods and to manage taxation effectively.
- Engage Professionals: This involves hiring tax consultants to manoeuvre through complicated excise taxation laws and regulations in order to be on the right side of the law.
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How Tax Consultants In Dubai can help you in avoiding excise tax penalty UAE
Tax Consultant Dubai will provide excise tax registration, excise tax filing, and payment of penalties consulting services to businesses that need help with excise tax compliance. The taxation laws in the UAE are very familiar to our professionals, and they will be able to offer you suitable solutions to suit your business needs.