Excise tax: Firms urged to count stocks by Nov 30
dubai — Businesses in the UAE have been asked to count their stocks by November 30 in order to report and pay the correct excise price and tax on the goods, tax experts said on Friday.
“Basically, the process is companies need to close their inventory on November 30, 2019, count volume of products that they have subject to excess tax as shortly after they have to file tax return which details all of the volume of excise tax. And they would pay excise tax which is applicable on the stock count,” said Thomas Vanhee, partner at Aurifer Middle East Tax Consultancy and an affiliate professor of tax law.
He advised businesses to be very careful about the valuation that they adopt for their products as well as map their goods flows properly around the logistics chains to ensure proper compliance.
The UAE will levy excise tax on electronic smoking devices and tools and sweetened beverages from December 1.
Vanhee said products made in or imported into the UAE need to have excise tax paid on December 1. He warned companies to ensure compliance as penalties on violations are quite heavy.
Vanhee was addressing the members of the Institute of Chartered Accountants of India – Dubai Chapter on Friday. Adrian Low, partner at Clyde & Co, shared insights about economic substance regulations and Anuj Kapoor, partner at KPMG Gulf, updated ICAI members about transfer pricing in the UAE.
Anish Mehta, chairman of ICAI – Dubai Chapter, said levying excise tax on e-cigarettes as well as beverages sweetened with added sugar will help rationalise consumer behaviour towards harmful products and improve health of residents. He said transfer pricing regulations will bring transparency and open market principles in to economy while economic substance rules will provide level playing fields regarding the conduct of businesses.
Anurag Chaturvedi, secretary of ICAI – Dubai Chapter, said businesses that are into activities related to excisable goods are required to first perform an assessment of their products by identifying the ingredients to classify them in to excusable goods categories.
“Secondly, they have to register these products with the Federal Tax Authority portal along with retail price. Businesses need to place caution in determining retail price which is higher of product list price or its designated standard selling price in the market.”
Nurani Subramanian Sundar, vicechairman of ICAI – Dubai Chapter, was also at the event.
Since excise tax on e-smoking devices and sweetened beverages just six weeks away, he alerted businesses to act quickly as the registration process takes a standard 20 working days.