This Public Clarification provides guidance on situations where stockpilers may be allowed to deregister where less than six months have passed since their effective date of registration for Excise Tax purposes.

Article 7(1) of Cabinet Decision No. 37 of 2017 on the Executive Regulation of the Federal DecreeLaw No. 7 of 2017 on Excise Tax (the “Executive Regulations”) prescribes cases in which an Excise Tax deregistration application may be rejected by the FTA. One of the cases is that the FTA may reject a deregistration application where less than six months have passed since the person was registered for Excise Tax.

For stockpilers who have the obligation to account for Excise Tax at a single point in time e.g. at the date the Federal Decree-Law No. 7 of 2017 on Excise Tax (the “Decree-Law”) came into effect in respect of new excise goods, the six-month rule would ordinarily require the stockpiler to remain registered for Excise Tax purposes for further tax periods after filing its first Excise Tax Return. This would be despite the fact the stockpiler has no further tax liability to report.

This Public Clarification discusses the circumstances in which stockpilers may be allowed to deregister before six months have elapsed since their effective date of registration.

Persons who have been registered for Excise Tax as a stockpiler, have met all of their Excise Tax obligations and no longer conduct or have the intention to conduct activities that will trigger an Excise Tax registration obligation are able to submit a deregistration application before six months have elapsed since the effective date of registration. The FTA will consider the deregistration application and provided the FTA is satisfied that all Excise Tax obligations have been met, it will approve the deregistration prior to the expiry of the 6-month period.

Discussion

Will registered stockpilers be allowed to deregister before six months have passed since their effective date of registration?

A person who has been registered as a stockpiler for Excise Tax purposes is able to submit a deregistration application before six months have elapsed since their effective date of registration.

In such cases, the FTA will consider the facts of the application and may request supporting information to verify that all Excise Tax obligations have been met. Where the FTA is satisfied this is the case, the FTA may approve the deregistration application prior to the expiry of the six month period

Conditions that must met before submitting a

deregistration application:

• The registered person has met all his tax obligations including filing of declarations, submission of tax returns and payment of all due tax.

• The registered person does not conduct or has no intention to conduct any of the following activities in the future, as outlined by Article 2(2) of Decree-Law:

  • Production of excise goods in the State, where such production was