On 22nd November 2020, the FTA announced a new notice stating the excise tax stock reporting requirements. According to the notice, one needs to submit an opening stock declaration in January 2021; the submission starts from 1st January 2021 and ends on 31st January 2021.
FTA has circulated the notice to excise tax taxable individuals. In the upcoming weeks, more details will be provided.
What the notice introduces?
FTA strives to enhance excise tax compliance. The excise tax stock reporting requirements will allow the FTA to put a check on stock movement to and from the designated zones. It will also support the FTA to reduce illicit trading of excisable goods.
Under the Opening Stock Declaration (EX204), the taxpayers need to disclose the opening stock held in a designated zone. The notice states that the excise tax taxpayers can add the stock quantity as per the previous declarations.
For the verification of excisable goods’ opening stock, the warehouse keepers require appointing approved external auditors. The external auditor will prepare a stock audit report, providing his true and fair opinion about an excise tax registrant’s opening stock in a designated zone. After that, the warehouse keeper will submit the opening stock declaration.
The warehouse keeper needs to appoint an auditor keeping in mind that 31st January 2021 is the last submission date. After that, the FTA may charge a penalty.
Whom the Opening Stock Declaration Will Affect?
The excise tax stock reporting requirement is only issued for the warehouse keepers that function in designated zones. Therefore, the excise tax taxpayers who don’t function in the designated zones will not be affected by the new requirement.
The warehouse keeper appoints a certified external auditor who audits the opening stock. The external auditor needs to audit the opening stock for each designated zone per excise tax registrant.
After the audit gets completed, the warehouse keeper needs to fill the opening stock declaration form available on the FTA portal. One can utilize the excel template provided by the FTA for opening stock declaration.
After the warehouse keeper submits the opening stock declaration, the excise tax registrant needs to approve it. In case of having opening stock at multiple designated zones, each zone’s warehouse keeper needs to submit the opening stock declaration separately.
- On 4th December 2020, the FTA published user guides providing guidance regarding opening stock declaration form filling.
- To provide awareness, the FTA conducted a virtual session where the key persons provided information regarding system and process changes.
- For every designated zone, there will be only one opening stock declaration per excise tax registrant.
- After the excise tax registrant approves the opening stock, no amendment is possible in the opening stock declaration.
- The warehouse keeper needs to attach the audit report along with the opening stock declaration.
You can’t move the stock out of a designated zone without submitting the opening stock declaration. Therefore, the submission must be made on or before 31st January 2021.
After making the opening stock declaration, the FTA will be reviewing the declaration and the audit report. In case of errors or variance, the FTA holds the right to implement administrative penalties.
N R Doshi and Partners provide external audit services to many companies in the UAE market for more than three decades. Therefore, we have developed our services to be aligned with the amendments.
Our external auditors are trustworthy and always strive to provide a true and fair opinion. Our efforts are in support of creating a market where the stakeholders can obtain a transparent view of the business. On the other hand, it will help the business win the trust of prospects and attract investments.
We are already updated with the new excise tax stock reporting requirements and keep tracking each FTA’s information releases. Therefore, our auditors can conduct an efficient audit in the provided period.