Before understanding the Excise Tax for Warehouse Keepers, it is essential to understand who a stockpiler is? A business that deals with excisable goods and cannot determine if the excise tax has already been paid for the same is known as a stockpiler. An excise warehouse is a place where goods are held in a designated zone, is a warehouse, location or area within UAE, where excise tax is not applicable.
The goods held in such designated zones will only be taxed when they leave the zone and circulated in other UAE areas. The information about the designated zone is shared by the FTA directly to the warehouse keepers and are also in charge of that particular zones. The new warehousing keeping laws are put in place to curb the illicit trading and wrongful movement of excisable goods all across the UAE.
Read also: Requirements of Registering Excise Tax
The new FTA reporting requires the warehouse keepers to disclose their opening stocks as of 1st January 2021. It is known as the Opening Stock Declaration (EX 204). Following are the steps:
Step 1 : Appointment of a certified external auditor
The opening stock needs to be audited by a certified external auditor. Therefore excise taxpayers within the designated zone were required to arrange an audit to disclose the correct opening stock on 1st January 2021. If you are looking for the best excise tax agents or excise tax consultancy in Dubai, click here to know more.
Step 2 : Completing the declaration form
Once the external auditing company shares their review, the excise taxpayers will need to fill the Opening Stock Declaration (EX 204). The auditor’s final review report document has to be attached while filing the declaration.
Step 3 : Ensuring the timely submission of the declaration
The Opening Stock Declaration is crucial for excise taxpayers because unless they submit the same before 31st January, their holding stock gets termed zero. It will put a halt to any movement of goods from the designated zone. In case of non-compliance, the excise taxpayer has to pay the penalty, and the overall stop on the movement of goods disrupts the supply chain process of the business. For offline submissions, the option to submit the opening stock declaration is made available from 4th December 2020.
Step 4 : Non registered Excise Taxpayers
Suppose the stockpiler is not an excise tax registered person with the FTA. In that case, they need to complete a similar form called the Non-Registered Excise Stock Movement Declaration form (204 A) for compliance with the declaration of opening stock.
Step 5 : FTA approval for the Opening Stock Declaration
A unique transaction number is provided to the tax registrant. The status of the declaration can be checked online on the FTA portal. The opening stock declaration cannot be submitted or approved after 31st January. In case of any error or missing documentation, your declaration can get rejected. Hence, it is essential to look for experienced tax agents in Dubai, Abu Dhabi, or other emirates. Click here to find out more.
The penalties for non-compliance of the opening Stock Declaration
- Restrictive movement of the goods
- Administrative penalties within and out of the designated zone
- The Opening stock consideration will be zero. Hence the movement of any stock will not be justified.
- Penalties will be levied if there is an error in reporting or submission of incorrect documents.
Notification of Change in the status of the warehouse keeper
Change of location
If the warehouse keeper is no longer based in the designated zone, it has to notify the FTA within 30 days of relocation. Informing the exact date of the warehouse keeper is no longer responsible for the supervision and management for the assigned Designated zone.
Cancellation of Warehouse Keeper Registration
The FTA will cancel the Warehouse Keepers Registration and provide the warehouse keeper applicant with the notification within 20 business days.
The authority terminates the responsibility under the designated zone if the warehouse is no longer required to function, such as the closure of business or movement of the company. However, the deregistration is only provided once all the pending responsibilities for the period are adhered to by the warehouse keeper.
Finding an excise tax agent in UAE
An external auditor is required to audit the opening stock at the beginning of the year. Finding Tax agents in Dubai or northern emirates is helpful to complete the declaration. Farahat and Co are considered one of the best tax consultancies in Dubai. Their team of Chartered Accountants will visit your warehouse offices and provide you with on-field support for opening stock declaration. You can be assured of no penalties and timely compliance when it comes to Farahat and Co, tax auditors. Their qualified team is well versed with the latest upgrades in the Warehouse Keeping laws and ensure compliance with the same. Click here and get a free consultation today!
Read also: Steps to Register Excise Tax in UAE