The Federal Tax Administration (FTA) has published amendments to the Excise Act introduced by Federal Decree-Law No. 19 of 2022 published on 26 September 2022. The main changes introduced by the decree-law are laid out below.
The first provision concerns the registration of excise duties:
- the decree law provides that a person importing excisable goods for purposes other than conducting business will be excepted from registration. The person shall, however, remain liable to pay the relevant excise duty on the import.
The second concerns the payment of the amount collected as excise duty:
- according to article 19 of the Decree Law, any amount(s) collected or reflected on an invoice as excise duty should be paid to the FTA.
The third rule concerns the limitation period:
- the Decree Law has introduced statute of limitation rules that set the maximum timeframe in which the FTA can take actions, such as commencing an audit or issuing a tax assessment; and
- as an exception to the general rule to conduct a tax audit or issue a tax assessment to the taxable person after 5 years from the end of the relevant tax period, the FTA may extend this right in the following instances:
- if the FTA notified the taxable person of the tax audit before the expiry of the 5-year period, provided that the tax audit is completed, or the tax assessment is issued within 4 years from the date of the notification of the tax audit;
- if the tax audit or tax assessment issuance relates to a voluntary disclosure submitted in the fifth year from the end of the relevant tax period, provided that the tax audit is completed or the tax assessment is issued, within 1 year from the date of submission of the voluntary disclosure. No voluntary disclosure may be submitted after 5 years from the end of the relevant tax period;
- in the case of tax evasion, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the end of the tax period in which the tax evasion occurred; and
- if a taxable person failed to register for excise duties within the prescribed period, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the date on which the taxable person should have registered excise duties.
Furthermore, the Cabinet may, according to a suggestion by the Minister of Finance, amend the statute of limitation in respect of instances where a taxable person was notified of an audit before the expiry of the 5-year period, or where a taxable person submitted a voluntary disclosure in the fifth year following the relevant tax period.
In all cases, the statute of limitation will be interrupted where any of the reasons as stipulated in Federal Law No. 5 of 1985, promulgating the Civil Transactions Law and its amendments, occur.