Guide to Tax Registration Procedures in the UAE for 2024

The process of Tax Registration holds significance as it enables taxable entities to adhere to the recent amendments made to the Federal Decree-Law No 7/2017 on Excise Tax in the United Arab Emirates through Ministerial Decision No. 108/2023. This article explains the guidelines and prerequisites that Taxable Persons must adhere to during the Tax Registration application process. Additionally, it delves into scenarios where individuals may qualify for exemptions, face rejections, or experience cancellations in Tax Registration, while also addressing the responsibilities of Warehouse Keepers in this context.

Application for Tax Registration

The Taxable Person is required to follow specific conditions and given criteria for registration purposes as stated below: -

• • Application Submission and Compliance: -They need to submit a complete application with all the information and data that the Authority asks for. They also need to submit a financial guarantee, which is an amount of money that the Authority decides. They need to follow any other requirements that the Authority sets, such as keeping records, reports, or decisions.
  • Timely Response: -The Authority promises to reply to Tax Registration applications within a reasonable time of 20 working days from when they receive the application.
  • Effective Date: -As per Article 2 of the Regulation, the tax registration is started on the first day of the month for Taxable Entities.

• Financial Guarantee Adjustment: -The Authority can change the value of the financial guarantee that the Taxable Person submitted at first if the situation changes.

• Warehouse Keeper Registration: -As per Article 9 the prescribed conditions are required to be satisfied to get registration as a whereabouts keeper while submitting a Tax Registration application under Article 5 of the law.

Exemption from Tax Registration

• Conditions for Exemption: -The Authority can exempt someone from Tax Registration if they show that they do not plan to import or take Excise Goods out of a Designated Zone for regular use.

• Term of “On a Regular Basis: -The term “on a regular basis” means importing or taking Excise Goods out of a Designated Zone more than once in six months.

• • Notification of Changes: - People who are exempted from Tax Registration need to tell the Authority quickly, within 20 working days, if anything changes that makes them need to register for Tax.

• Loss of Exemption: -If a person does not meet the conditions of exemption anymore, the Authority will register them for Tax from the date when they stopped meeting the conditions.

Import-related Tax Payment: -If a person who is exempted from Tax Registration has to pay tax for importing Excise Goods, they need to pay the amount before or on the date of importing the goods, using the methods that the Authority decides.

Tax Registration Application Rejection

Rejection Criteria: -The Authority can reject Tax Registration applications if it sees that the applicant does not want to do the activities that they need to do, or if they do not give the information and data that they need to give.

• Notification of Rejection: -If the Authority rejects the application, it will tell the Person within 20 working days from when they got the application, following the steps in the Tax Procedures Law.

• Commitment to Compliance: -Even if the Authority rejects the application, the Person still needs to follow the rules of the Decree-Law, including applying for Tax Registration again when they meet the requirements.

Cancellation of Tax Registration

Application for Cancellation: -

People who are registered for Tax need to start the cancellation process within 30 days from when they do not have to pay Tax anymore, as per the rules of Article (4) of the Decree-Law.

• When to Apply for Cancellation: - You should apply for cancellation of your tax registration within 30 days from the date you stop being liable for tax such as excise goods stockpiling, producing, and importing However, one must wait for at least six months after your registration date before you can apply for cancellation, unless the Authority agrees otherwise.

• How to Apply for Cancellation: - To apply for cancellation of your tax registration, you need to submit an application to the Authority with the required information and documents.
• The Authority will review your application and decide whether to approve or reject it within 20 working days. The Authority is bound to inform you regarding the decision whether rejection or acceptance within 5 business days.

What to Do After Cancellation: -

 After your tax registration is canceled, you must comply with some obligations, such as:

• Paying any outstanding taxes and penalties that you owe to the Authority
• Filing any pending tax returns that you are required to submit
• Tax records are required to maintain for 10 years minimum from the cancellation date.
• Applying for tax registration again if you resume any of the taxable activities

When the Authority Can Reject

Your Cancellation Request Sometimes, the Authority may reject your request to cancel your tax registration. This article explains the reasons and the procedures for rejection.

• Why the Authority Can Reject Your Request:- The Authority can reject your request to cancel your tax registration if:

• It believes that you are likely to resume the taxable activities within the next 12 months
• Failure to prove tax liability
• You have not completed six months from your registration date

• How the Authority Will Notify You: - If the Authority rejects your request to cancel your tax registration, it will notify you within 20 working days from the date of your application. The notification will follow the steps in the Tax Procedures Law.
• When to Register for Tax: - You should register for tax before the date that the Authority announces as the commencement date of the tax. This is the date when the tax becomes effective and applicable to the taxable activities.
• How to Register for Tax: - To register for tax, you need to submit an application to the Authority with the required information and documents.
• What If You Don’t Register for Tax: - If you don’t register for tax before the commencement date, the Authority may register you automatically from that date. This means that you will be liable for tax from the commencement date, even if you did not apply for registration.

What Is a Designated Zone:

A designated zone is a fenced area that meets certain conditions set by the Authority, such as:

• Having security measures and customs controls.
• Being isolated from other areas where excise goods are produced or sold.

A designated zone is a special area where excise goods can be stored without paying tax, until they are released for consumption or export.

• What Are Your Obligations as a Warehouse Keeper: -

 As a warehouse keeper, you must comply with some obligations, such as:

• Limiting the quantity and type of excise goods that you can store in the designated zone, as per the Authority’s instructions
• Implementing the security measures and customs controls that the Authority requires
• Following the rules and procedures that the Authority sets for the movement of excise goods in and out of the designated zone

How to Change Your Status as a Warehouse Keeper

If you are registered as a warehouse keeper under the Federal Decree-Law No 7/2017 on Excise Tax in the United Arab Emirates, you may need to change your status in some situations. 

When to Report a Change to the Authority:

You should notify the Authority of any change that affects your status as a warehouse keeper within 30 days from the date of the change. This includes changes such as:

• Stopping or starting the operation of a designated zone.
• Transforming the location or proportions of a designated area.
• Changing the ownership or management of a designated zone
• Changing the type or quantity of excise goods that you store in a designated zone

Guidelines for Notifying the Authority of a Change:

To notify the Authority of a change in your status as a warehouse keeper, you need to submit a notification to the Authority with the updated information and data. 

In conclusion, this document underscores the critical role of tax registration procedures in ensuring compliance with the Federal Decree-Law No 7/2017 amended vide Ministerial Decision 108/2023 on Excise Tax in the United Arab Emirates. The article presents a thorough overview of the application process, timelines, and prerequisites for tax registration, encompassing exemptions, rejections, and cancellations. Furthermore, it sheds light on the essential functions of Warehouse Keepers, elucidating their registration process and detailing the obligations inherent in their role. The document emphasizes the utmost importance of submitting documentation in a timely and accurate manner, ensuring adherence to regulatory standards, and highlights the consequences of non-compliance. This includes the Authority's authority to reject applications and the requirement to settle outstanding taxes and penalties.