The Federal Tax Authority (FTA) has announced that businesses must complete Corporate Tax registration within 90 days from the Date of Incorporation / MOA.
The UAE Federal Tax Authority (FTA) has recently announced an update regarding the amendment process for financial guarantees submitted by clearance companies.This update is important because financial guarantees serve as a compliance requirement for businesses involved in import, export, and excise goods movement. The amendment process ensures that clearance companies continue to meet the latest FTA standards and maintain their eligibility to operate.
Staying informed about this change helps companies avoid penalties, disruptions in customs clearance, or suspension of tax-related activities.
What Is the Financial Guarantee and Who It Covers
A financial guarantee is a mandatory security deposit or bank guarantee required under the FTA framework for entities handling excise goods or managing customs clearance operations.
Purpose:
- It protects the UAE government against non-compliance with VAT and excise tax obligations.
- Ensures businesses handling excisable goods pay the correct taxes and duties.
Who Needs It:
- Clearance companies authorized to handle excise goods at UAE ports and borders.
- Businesses holding an excise tax registration in UAE involved in storage, import, or export of taxable products (e.g., tobacco, energy drinks, carbonated beverages).
This guarantee remains a core condition for maintaining active excise tax and VAT compliance status under FTA rules.
When and Why an Amendment Is Required
An amendment to the financial guarantee becomes necessary when there is any change that affects your company’s registered or operational details, such as:
- Change in business ownership or trade license information.
- Update in import/export activities or transaction volume.
- Adjustment of customs roles or warehouse operations.
- Any revision in the amount or coverage of the original financial guarantee.
Keeping the guarantee up to date ensures continued FTA compliance and prevents suspension of excise or clearance authorizations. Failure to amend details promptly could result in penalties or delays in import/export clearance.
For businesses offering VAT services in UAE or those under excise tax registration, this amendment is essential to remain fully compliant.
Amendment Process
The FTA has simplified the amendment procedure through its EmaraTax portal. Below are the key steps:
Step 1: Login to EmaraTax
Access your company’s account on the EmaraTax portal using your FTA credentials.
Step 2: Select Amendment Request
Under the “Financial Guarantee” section, select the option to amend an existing guarantee.
Step 3: Upload Documents
Prepare and submit:
- Updated trade license.
- Bank guarantee letter (reflecting revised amount or duration).
- Supporting documents showing the reason for the amendment (e.g., customs approval, ownership change).
Step 4: Submit the Original Guarantee
In certain cases, the original bank guarantee document must be physically delivered to the FTA or relevant authority for verification.
Step 5: Review and Approval
The FTA reviews the request and approves amendments typically within 10–15 business days, depending on accuracy and completeness.
It’s highly recommended to consult professional VAT advisors or excise tax consultants in UAE to ensure all documentation meets FTA standards and timelines.
Key Points to Remember
- Validity Period: Financial guarantees are typically valid for 12 months and may include automatic renewal clauses.
- Updated Trade License: Always attach the latest trade license when filing an amendment.
- Timely Submission: Submit amendment requests before your guarantee expires or business details change.
- FTA Tracking: You can monitor the status of your request directly on the EmaraTax dashboard.
- Compliance Scope: Businesses providing VAT services in UAE or registered under excise tax registration in UAE should regularly review guarantee validity and renewal dates to avoid disruption.
Conclusion
The FTA’s update on the amendment process for financial guarantees emphasizes the importance of maintaining accurate and active compliance records. Clearance companies and businesses registered under excise tax must ensure their guarantees reflect the latest operational details, trade licenses, and financial coverage requirements.
By staying proactive and regularly reviewing your financial guarantee, you protect your business from penalties, delays, or suspension of FTA approvals. For expert assistance with amendments, submissions, or compliance under VAT services in UAE and excise tax registration in UAE, you can rely on Reyson Badger’s professional tax advisory team.
Contact us today to get personalized help with your FTA compliance and EmaraTax processes.
