On 13 February 2020, the Federal Tax Authorities (FTA) issued a clarification (EXTP004) on the deregistration of stockpilers for excise tax purposes (the clarification).
In accordance with provisions of article 1 of Federal Decree-Law No. (7) of 2017 on Excise Tax, a stockpiler is "the Person who owns excise goods and cannot demonstrate that such goods had been previously subject to tax". A person considered to be a stockpiler has to register for excise tax purposes in order to file and pay the excise tax due.
A stockpiler that is registered for excise tax purposes and has fulfilled its tax obligations, and no longer conducts or has the intention to conduct activities that will trigger an excise tax registration obligation may submit a deregistration application. However, prior to the clarification, the deregistration application was rejected by the FTA if it was submitted less than 6 months after the person had been registered for excise tax purposes. As from the clarification issuance, the FTA will consider the deregistration request submitted by the person having registered as a stockpiler for excise tax purposes even if that request is filed before the end of a 6-month period since the person's registration and may approve it under the following conditions:
- the registered person has met all its tax obligations, including filing of declarations, submission of tax returns and payment of all due taxes; and
- the registered person does not conduct or has no intention to conduct any activities related to the production or importation of excise goods or release of excise goods from a designated zone.
The FTA further provides that the person having filed the request for registration must be prepared to provide the following documents:
- a copy of its audited records showing:
- the stock quantity of excise goods as at the date at which liability to account for excise tax on those goods arose; and
- the stock quantity and sales of excise goods during the 12 months prior to the liability date;
- a copy of the calculations prepared to determine whether the person held excess excise goods as at the liability date; and
- the evidence supporting that excise tax was paid on the excess excise goods.
Finally, the FTA points out that it may ask for further information and will consider each deregistration application on a case-by-case basis.