26 Oct 2022
On 14th October 2022, the UAE Ministry of Finance announced amendments to some provisions of the Federal Decree-Law No 7 of 2017.
Several provisions of the law have been amended in order to support the business sector, facilitate compliance for taxable persons, minimize tax avoidance, and address challenges related to the application of the excise tax.
Besides amending the Federal Decree-Law No. 7 of 2017 on Excise Tax, the Federal Decree-Law No. 19 of 2022 adds the following amendments:
- Tax registration is not required for those importing excise goods for purposes other than conducting business, but they remain liable to pay the excise tax associated with the import. A further amendment requires submitting the application for exemption prior to the import activity, not when the tax is due.
- In addition, a new Clause confirms that any person receiving tax or issuing an invoice reflecting tax must settle the amount with the Federal Tax Authority (FTA), and the amount is treated as due tax. As a result, someone subject to the tax must pay the FTA the amount he receives as tax, regardless of whether the tax was applied by mistake or evasion.
The Statute of Limitations Article specifies the maximum timeframe for the FTA to enforce Excise Tax. Upon expiration, the FTA is prohibited from taking any action. Generally, the FTA may not issue a tax assessment or conduct a tax audit on a taxable person after 5 years from the end of the relevant tax period.
In Among other changes, new technical definitions (such as "Tax Audit," "Tax Procedures Law," etc.) have also been added as part of the amendments of the Excise Tax Decree-Law, as well as the change in the wording from "Federal Law No. (7) of 2017 on Tax Procedures" to "the Tax Procedures Law." According to the Decree, the amendments came into effect on 14th October 2022.
