Understanding Changes to Warehouse Keeper Regulations in the UAE

On November 6, 2023, the UAE government introduced key updates to the Executive Regulation of the Federal Decree-Law No. 7 of 2017 on Excise Tax, with Cabinet Decision No. 108. These updates significantly affect the responsibilities of Warehouse Keepers operating in Designated Zones, particularly with regards to the protocols for notifying the relevant authority of any changes in their circumstances.

As the regulatory landscape of excise tax continues to evolve, stakeholders must be proactive in understanding these changes to avoid penalties and ensure operational efficiency. Below, we take a closer look at the key provisions of Article 10 of Cabinet Decision No. 108:

1. Timely Notification of Changes

Under the new regulation, Warehouse Keepers are required to notify the relevant authority of any circumstances affecting their registration within 30 days of the event occurring. This highlights the necessity of managing changes in a Warehouse Keeper’s operations promptly. Whether a Warehouse Keeper ceases to manage a Designated Zone or experiences a change in operational status, timely notification is critical to ensure that the authority has accurate and up-to-date records of registered entities.

The emphasis on this timely communication underpins the authority’s objective to ensure that only compliant entities continue to operate within the excise tax framework.

2. Cancellation of Registration

Once the relevant authority is notified that a Warehouse Keeper has ceased to manage a Designated Zone, it will proceed to cancel the Warehouse Keeper’s registration. Failure to notify the authority promptly can lead to continued liabilities, as obligations that no longer apply could remain in place. This reinforces the importance of adhering to the notification timeline and maintaining clear communication with the authority.

3. Authority’s Response Timeline

Following the notification, the authority is obligated to respond within 20 business days. This timeline ensures transparency and provides Warehouse Keepers with timely feedback on their compliance status and any necessary steps they must take moving forward. This structured response period offers clarity to both parties involved and ensures smoother regulatory compliance.

4. Deregistration Process

If a Warehouse Keeper seeks deregistration, the authority will terminate the responsibilities associated with managing the Designated Zone. However, deregistration will not be finalized until the Warehouse Keeper has fulfilled all obligations and duties for the duration of their registration. This provision stresses that deregistration is contingent upon the completion of all compliance measures, preventing a premature exit from the regulatory framework.

5. New Warehouse Keeper Registration

In cases where a Warehouse Keeper is applying for deregistration but the operations of the Designated Zone need to continue, they must submit a new Warehouse Keeper registration form alongside their deregistration application. This ensures a smooth transition of responsibilities, maintaining compliance and preventing any operational disruption within the Designated Zone.

Conclusion

The amendments brought forward by Cabinet Decision No. 108 of 2023 reinforce the importance of compliance and transparency for Warehouse Keepers under the Federal Decree-Law No. 7 of 2017 on Excise Tax. As the regulatory framework evolves, it is crucial for stakeholders to stay informed about these changes and update their operational practices accordingly.

Warehouse Keepers must be diligent in understanding their responsibilities and act swiftly to comply with these regulations. Failing to do so can lead to penalties and disrupt operations within Designated Zones. Regular training, strong internal procedures, and clear communication with the relevant authorities will be critical to navigating these changes successfully.

summary

Cabinet Decision No. 108 of 2023, issued on November 6, updates the Executive Regulation of the Federal Decree-Law No. 7 of 2017 on Excise Tax, specifically concerning Warehouse Keepers in Designated Zones. Article 10 mandates that Warehouse Keepers notify the Authority within 30 days of any changes affecting their registration. The Authority will cancel the registration upon notification and respond within 20 business days. If a Warehouse Keeper applies for deregistration, they must ensure all responsibilities are fulfilled before deregistration is granted. Additionally, if the Designated Zone requires ongoing operation, a new Warehouse Keeper registration form must be submitted with the deregistration application. These updates emphasize the importance of compliance and proactive communication to maintain operational integrity within the excise tax framework. 

Disclaimer: The Content offer general guidance and should not be considered legal, financial, or tax advice. Consult qualified professionals for personalized guidance. While efforts have been made to ensure accuracy, no guarantee is provided for completeness or applicability to individual situations. Users are responsible for their interpretation and actions based on this information, at their own risk.   

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