Excise Tax Advisory Services

Excise Tax Consulting

Excise tax is a form of indirect tax levied on specific goods called “excise goods” which are typically harmful to human health or the environment. The Excise tax was introduced across the UAE in 2017.

The purpose of levying excise tax is to reduce the consumption of unhealthy and harmful commodities as well as to raise revenues for the government that can be spent on beneficial public services. Ultimately, consumers need to pay more for goods that are harmful to human health or the environment. 

Under the UAE Federal Decree-Law No. 7 of 2017 on Excise Tax, it is the responsibility of a business to register for excise tax. The deadline for registration for companies was November 30, 2019. The deadline for registration of stocks is January 15, 2020.

It is advisable that a Taxable person engaged in activities relating to excise goods such as tobacco products, carbonated drinks, and energy drinks should empower an audit firm to get professional advice on Excise Tax issues. 

CDA is one of the leading accounting, tax, and bookkeeping services providers, who provide excellent excise tax advisory services in UAE to its clients and ensures that the clients comply with the tax law.

Who should Register for Excise Tax? 

The companies that are engaged in the following areas are to Register for Excise Tax: -

• The import of excise goods into the UAE
• The production of excise goods where they are released for consumption in the UAE
• The stockpiling of excise goods in the UAE in certain cases
• A warehouse keeper who is responsible for overseeing an excise warehouse or designated zone. 

Rights of a person during a Tax Audit relating to Excise Liability in UAE 

During the proceedings of Tax Audit, a taxable person has the following rights - 

• To monitor the procedure while the documents are being removed by the auditor
• To get back the documents if removed by the auditor once the tax assessment is completed. 
• To demand and obtain a receipt from the auditor against the removal of any record or document. 

Products to be Registered as Excise Goods 

• Carbonated drinks including any aerated beverage except for unflavoured aerated water
• Energy drinks, which comprise any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that give mental and physical stimulation.
• Tobacco and nicotine products
• Electronic smoking devices and tools
• Fluids used in electronic smoking devices and tools
• Sweetened drinks. 

Products Exempted from Excise Tax - 

• Ready-to-drink beverages containing at least 75 percent milk or milk substitutes
• Baby formula/Baby food
• Beverages consumed for special dietary needs 
• Beverages consumed for medical uses.

Rate of excise tax-

As per the Cabinet Decision No. 52 of 2019 on Excise Goods, the rate of the excise tax is given as below:

• 50 per cent on carbonated drinks
• 100 percent on tobacco products
• 100 percent on energy drinks
• 100 percent on electronic smoking devices
• 100 percent on liquids used in such devices and tools
• 50 per cent on any product with added sugar or other sweeteners.

New excise list and tax rates - 

• 50 per cent on Sweetened drinks 
• 100 percent on Electronic smoking devices and tools 
• 100 percent on Liquids used in electronic smoking devices 

Minimum Price for Tax Registration - 

• A minimum price of Dh0.40 must be applied per individual cigarette; and a minimum price of Dh0.10 must be applied on waterpipe tobacco, ready-to-use tobacco or similar product. 

Records to be maintained as per Excise Tax Law in Dubai, UAE 

A tax registered person is required to maintain the following documents as per the Excise Law in the UAE for a one-year period prior to Excise Tax implementation

• Accounts and supporting documents of all imported, produced or stockpiled Excise products/ goods.
• Proof of excise products sold outside the UAE.
• Supporting documents of excise goods exported outside the UAE.
• Detailed account of physical inventory held by the taxable person.
• Account of excise goods if lost or destroyed.
• Tax record regarding tax due on excise goods imported/manufactured by the taxable person in the UAE.
• Tax record regarding tax due on excise goods that are purchased or produced for the purpose of stockpiling.
• Proof of tax deducted on tax paid and submitted on excise goods sold outside the UAE

• Statement of item-wise details of excise goods physically kept by the taxable person in the context of value and quantity.
• Statement of information concerning average monthly inventory held by the taxable person.
• Statement of information concerning average monthly sale for each excise item.
• Statement of details concerning excise products manufactured by the taxable person.
• Statement of details concerning excise products purchased from outside the UAE (Import) by the taxable person.

• Item wise details of Excise goods produced by the taxable person.
• Item wise details of Excise goods imported by the taxable person.
• Item wise details of Excise goods sold locally by the taxable person.
• Item wise details of Excise goods sold outside the UAE (Export) by the taxable person.
• Item wise details of Excise goods released from the specified designated zone.
• Details of the companies and retailers the excise products are sold by the taxable person.

Tax Compliance and Penalties 

• FTA has the authority to conduct audits of taxable businesses and then impose penalties on those that do not comply with the law. 
• FTA’s database is linked directly to the customs department and the taxable items under excise list have item codes that can be easily identified.
• Following the implementation of excise duties on the newly added items, importers will not be able to clear any of the taxable items through customs if they are not registered with the FTA.
• The failure to register for excise duties within the deadline invites a penalty of Dh20,000
• The failure to register excess existing stocks of taxable items as of December 1, 2019, ahead of January 15, 2020, could invite a penalty of Dh20,000.

CDA Excise Tax Advisory Services in Dubai 

CDA offers various sort of excise tax advisory services in Dubai including tax planning, verification of documents, assessment of tax calculation, etc. Given below are the excise tax advisory services offered by CDA:

• Excise Tax Planning & Advice 

CDA professionals help our clients to manage excise taxes and make them understand opportunities to mitigate their impact. 

• Verification of all the documents 

CDA experts verify all the documents relating to excise goods and evaluate whether the documents maintained to follow the requirements of the UAE tax laws.

• Assessment of Tax Calculation 

CDA professionals will check the tax calculated by the taxable person and ensures that the tax calculated is accurate

• Performing Stock count 

CDA professionals will perform a stock count on a specific date in order to verify the accuracy of the physical inventory maintained by the taxable person.

• Training to the staff 

CDA experts will train the staff members of the company on tax audit to prepare them to face if any tax audit in the future.

• Excise Tax registration support services 

CDA professionals give unlimited support to our clients to lead them through the whole procedure of tax registration services without any difficulty.

• Excise Tax compliance services 

CDA experts will analyse all the documents related to tax and ensure if they are Tax compliant or not, and will initiate further action.

• Ensure Accuracy in tax report for Excise Tax Audit 

CDA professionals review Excise Tax records, returns & reconciliation and ensure timely submission of Excise Tax returns for Excise Tax Audit conducted by the FTA. CDA experts can help you maintain your tax records as per the tax law and comply with to avoid penalties and save your money and energy. Our tax specialists support and guide businesses with excise tax registration and systematic excise tax advisory services in the UAE on the compliance of tax law. We can lead you throughout the tax procedures and help your business to grow by providing better strategies.

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. 

To avail excise tax advisory services in UAE or other related services, get in touch with us.