EXCISE TAX: EVERYTHING YOU SHOULD KNOW ABOUT THE EXCISE TAX IN UAE

Nowadays, there are countless pieces of queries on the excise tax and its calculation. The frequent enquiries regarding excise tax in the UAE put forward includes: how to register for excise tax? How to get prepared for excise tax? And how to make sure your business is 100% compliant with UAE excise tax? Here is everything you should know about the excise tax in the UAE. Excise tax is an indirect tax levied on excisable goods that are harmful to human health. It was introduced across the UAE in 2017 to improve the standard of healthy living.

Who is responsible to register for excise tax?

Any business involved in the following processes is responsible to register for excise tax within 30 days after the opening of the business or the effective date of the law, whichever is earlier. 

• Importing excisable goods into UAE
• Producing excise goods for consumption in the UAE
• Stockpiling of excise goods in a particular instance
• Overseer of an excise warehouses

As our living is dependent on various products, the products to be registered for excise tax are mentioned below: 

• Carbonated drinks include any aerated beverage except for unflavoured aerated water. 
• Energy drinks include any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that provide mental and physical stimulation, which includes without limitation: caffeine, taurine, ginseng and guarana. 
• Tobacco and tobacco products 

How to register for excise tax?

Excise tax registration is done through the FTA portal. If you intend to register for excise tax consider the procedures as follows:

• Create an e-Services account with the FTA: Sign up with your email address and unique password of 6-20 characters and Verify your e-Services account
• Log in to the account and Understand the icons and symbols on the registration form
• Confirm by clicking the button ‘Click here to confirm and proceed to initiate the Excise Tax Registration Form
• Fill in the required fields by providing accurate answers to the questions on your Excise Tax registration, amendment forms, and the de-registration application
• Once you are convinced that all of the information is correct, click on the ‘Submit for Approval’

What are the exempted goods from excise tax?

The exempted goods from excise tax include ready-to-drink beverages containing at least 75 per cent milk, baby food, beverages consumed dietary needs and medical uses. Products are usually charged during its release or consumption period. With regard to this, the producer, manufacturer or the importer of the excise goods will have the excise tax. The situations where the excise tax will be applied are: 

• At the time of excise goods production: this is the situation where the company decided to produce the excise goods which are harmful to the health and the environment
• At the time of importing the excise goods: where the businessman decided to import the excise goods for consumption or any other production purposes which are harmful to the health and the environment, the excise tax will be applied. 

Excise Tax Rates

Following are the excise tax rates prevailing in the federal law of the country:

• Tobacco and tobacco products 100% and Liquids in electronic smoking devices and tools 100%
• Electronic smoking devices and tools 100% and Carbonated drinks 50%
• Energy drinks 100% and Sweetened drinks 50%

The two methods for charging excise tax are ad valorem and specific. Ad valorem uses the fixed percentage on particular goods or services whereas specific taxes are fixed dollar amounts on goods. In some cases, an excise tax is charged on goods that have a high social cost, such as cigarettes and alcohol; these taxes are sometimes called sin taxes.

Why choose CDA?

CDA has a team of expert tax consultants in UAE, with wide experience in diverse fields, who can assist you with your excise tax and various other tax accounting services. CDA tax specialists will help you throughout to finish all the procedures to make you comply with the law. They will help you furnish all the required documents to be submitted for the tax registration process and make you ease from the hazard.

CDA Accounting & Bookkeeping Services LLC also professionally handle CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software Services, Due Diligence Services, and VAT Consultancy Services in Dubai on time according to the convenience of our good clients. 

Feel free to contact us. Our tax consultants will give you one-hour Free Consultation to drive away your worries!