Federal Tax Authority urges businesses to file tax returns by November 15
Failure to submit returns on time will incur hefty penalties
The UAE’s Federal Tax Authority (FTA) has urged businesses to file their returns for excise tax before Wednesday deadline to avoid paying penalties.
Last month, the UAE introduced an excise tax on tobacco and energy drinks at a rate of 100 per cent and 50 per cent on sugary drinks with the goal of curbing unhealthy habits and shoring up government revenue hit by lower oil prices.
The tax is settled monthly with payment taking place within 15 days after the end of each month. The first collection will take place on Wednesday.
“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,” said Khalid Al Bustani, the director general of the FTA. “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.”
Companies that fail to submit a tax return by Wednesday will pay a Dh1,000 penalty for first time offence and Dh2,000 for repetition within 24 months.
Failure to settle the payable tax in the submitted tax return and any inaccuracy of submitted data also incur penalties.
There are around 250 companies in the UAE subject to excise tax.
The UAE is the second country in the Arabian Gulf to introduce an excise tax after Saudi Arabia, which began collecting tarrifs in June. Other countries are expected to follow suit next year.
Individuals or businesses subject to the tax include producers of excisable items, importers, stockpilers like hotels and restaurants and warehouse keepers.
The introduction of excise taxes and value-added tax on January 1, 2018 are expected to boost the inflation rate by a one-off 1.4 per cent, Mr Al Bustani said in August.
Updated: November 12, 2017 07:16 AM