Excise Tax Audit

Uncover your future. Identify and remediate Tax Compliance violations with an Excise Audit

Management of excise taxes and knowledge of possibilities to reduce their impact is essential for all businesses operating in affected industries. Businesses must devise effective methods to traverse the UAE’s rapidly evolving Excise Compliance landscape. A third-party expert’s Excise Audit is a smart approach to discover areas of potential future tax non-compliance that could hinder your operations. An Excise Audit identifies not only single occurrences of Tax Compliance violations but also chronic areas, as each violation of Tax Compliance results in a hefty fine.

A third-party expert’s Excise Audit is a smart approach to discover areas of potential future tax non-compliance that could hinder your operations. An Excise Audit identifies not only single occurrences of Tax Compliance violations but also chronic areas, as each violation of Tax Compliance results in a hefty fine.

What is an Excise Tax Audit?

An excise tax audit verifies a taxable person’s excise tax liability for a given Tax period. This is an evaluation to determine whether or not liabilities are recorded accurately and paid by the due date.

What is the scope of a UAE Excise Tax Audit?

The Excise Tax Authority may conduct Tax Audit whenever it finds it essential. The Tax Auditor can either visit the taxable person’s location or be invited to the FTA’s headquarters to conduct the Tax Audit.
Tax Audit
Audit employs

Who is Subject to Audit?

The Federal Tax Administration will choose who should be audited and how frequently. A person registered for Excise tax or who is required to register for Excise tax may be audited at the authority’s discretion. It shall be determined by the Tax Auditor/FTA based on the anticipated risk of tax evasion or inaccuracies.

How would one be aware of the Excise Tax Audit?

Normally, FTA provides the taxable person with five days’ notice prior to a Tax Audit. In the case of suspected tax evasion, however, an unexpected visit from the tax auditor is always possible.
Process of excise tax

Process of Excise Tax Audit

During a Tax Audit, the Tax Auditor will examine the taxable person’s records, inventories, and premises, among other things, to determine the actual taxable situation of the taxable person. The Tax Auditor has the authority to take a copy or the original of the papers for further examination. In order to comprehend the business and confirm specific transactions, the tax auditor is permitted to speak with personnel from various company divisions, such as accounting, logistics, warehouse manager, etc.

Requirements for an Excise Tax Audit

A taxpayer subject to a Tax Audit must provide full cooperation and assistance to the Tax Auditor during the Tax Audit. Likewise, if the taxable individual has a tax agent or legal representative, he will also be accountable.
  • The Tax Auditor should be permitted to enter the taxable person’s premises.
  • The Tax Auditor should have access to all records and documents about the Excise Tax.
  • During a Tax Audit, the person responsible for preparing the Excise Tax Return must be present.

What do we do as External Auditors for you?

  • We will examine whether the documentation maintained for excisable products are under the UAE Excise Tax Law.
  • We will examine the Tax calculation sheet prepared by the Taxpayer to ensure no discrepancies.
  • We shall physically check and certify the inventory the Taxable Person maintains on a specific date. This will ensure the accuracy of the Excisable goods movement reconciliation.
  • We will ensure that the Taxable Person is prepared to face an upcoming Tax Audit.

What records must be kept following UAE Excise Tax?

A tax-paying individual is required to maintain nine records for Tax Audit.

  1. Documentation of all manufactured, imported, and stocked Excise Goods
  2. Documentation of exported Excise Goods Documentation of stock levels
  3. Evidence of exported Excise Goods
  4. Records of stock levels.
  5. Specific documentation of lost or destroyed Excise Goods
  6. Record of Tax Due for Imported Excise Goods
  7. Tax Record for Produced Excise Goods with Due Tax
  8. Tax Record for Due Tax on Excise Goods that have been stockpiled.
  9.  As evidence of deductible tax:
    • Tax paid on exported Excise Goods.
    • Tax paid on Excise Goods constituting another Taxable or Taxable Excise Good.
    • Amounts paid in error to the Tax Authority.
UAE Excise Tax

frequently asked questions

Throughout a Tax Audit, the Tax Auditor may request the following:
  • Original records
  • Copies of documents.
  • Samples of a product
The preceding documents comprise invoices, a tax estimate sheet, etc.
During the course of the Tax Audit, you will be permitted to oversee the removal of documents by the Tax Auditor. If the Tax Auditor removes records or other materials in connection with the Tax Audit, he or she has the right to retrieve them following the assessment. The taxable person may request a receipt (documentary evidence) for the Tax Auditor's removal of any documents or samples.
The UAE's Excise Tax law went into force on October 1, 2017. This law applies to tobacco and energy drinks at a rate of 100 percent and to carbonated drinks at a rate of 50 percent.

Why Choose ADEPTS

Expertise and Experience
At Adepts Chartered Accountants, our team consists of highly skilled professionals with extensive experience in managing complex regulatory and accounting standards. We are proficient in both local and international regulations, ensuring our services are accurate and fully compliant.
Tailored Solutions
Recognizing the unique nature of each Business, we offer customizable services designed to align with your specific needs and business objectives. We collaborate closely with you to understand your requirements and deliver solutions that achieve optimal results.
Time and Cost Efficiency
By choosing our services, you benefit from significant savings in time and resources. Our solutions are engineered to be cost-effective, providing high-quality support without the need for substantial internal investment.
Accuracy and Compliance
We prioritize accuracy and compliance in every aspect of our service. Our meticulous approach and rigorous procedures ensure precision and adherence to standards, reducing the risk of errors and the potential for non-compliance penalties.
Dependable Service
Dedicated to delivering reliable and consistent services, we aim to build long-term relationships with our clients based on trust, integrity, and mutual respect.