UAE businesses asked to file excise tax returns, pay dues before November 15

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.

The authority has stressed the necessity of filing returns regularly before the 15th of every month for the previous tax period. All businesses registered for Excise Tax must pay the due tax on excisable goods (50 per cent on carbonated drinks, 100 per cent on tobacco products and energy drinks) to avoid penalties stipulated in Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of the Tax Laws in the UAE.

"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," Khalid Al Bustani, director-general of the Federal Tax Authority, said.

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 Dh1,000 penalty in the first time and Dh2,000 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 per cent of the unpaid tax - due immediately once the payment of payable tax is late; 4 per cent, due on the seventh day following the deadline for payment; and a 1 per cent 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 per cent.

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 Dh3,000 plus a percentage-based penalty of up to 50 per cent of the amount unpaid.