What Are the Excise Tax Refunds Available in UAE?

Excise tax is one of the taxes imposed on businesses in the UAE, applied to specific goods such as tobacco, sugary drinks, and energy drinks. Excise tax is levied at a standard rate of 100% on tobacco products and 50% on energy drinks and soft drinks containing sugar. Businesses that import or manufacture excise goods in the UAE are eligible for refunds on the excise tax they pay under several distinct scenarios. This article covers the different types of excise tax refunds available, a worked example, and the documentation each requires.

Also check: Excise Tax UAE

Refunds on Excise Tax Paid on Imports

One of the most common types of excise tax refund in the UAE applies to businesses that import excise products. When businesses import excise products, they’re required to pay excise tax at the point of entry into the UAE. Businesses can claim a refund of the excise tax paid on imported products if they meet certain conditions, the imported goods must have been re-exported or destroyed.

If the goods are re-exported, the refund is granted if the re-exportation is completed within 90 days of the import. Businesses must provide the necessary documentation to prove the goods have been re-exported or destroyed, including the import declaration, the export declaration, and any other relevant documents.

Refunds on Excise Tax Paid on Manufactured Goods

Another type of refund applies to businesses that manufacture excise products within the UAE. When businesses manufacture excise goods, they’re required to pay excise tax on production. Businesses can claim a refund of the excise tax paid on the manufactured products if the goods have been exported or destroyed.

If the goods are exported, a refund is granted if the exportation is completed within 90 days of production. Businesses must provide documentation proving the goods have been exported or destroyed, including the production declaration, the export declaration, and any other relevant documents.

Must check: Excise Tax Consultancy

Worked Example: Claiming a Refund on Re-Exported Imports

A business imports 5,000 units of energy drinks into the UAE, paying excise tax at 50% of the excisable value, AED 400,000, at the point of import. Due to a change in market conditions, the business decides to re-export the full shipment to a neighboring country 60 days after the original import. Because the re-export occurs within the 90-day window, the business is eligible to claim a refund of the full AED 400,000 in excise tax paid, provided it submits the import declaration, the export declaration, and any other required supporting documents to the FTA. Had the business waited until day 95 to re-export, this same refund claim would likely have been rejected for falling outside the 90-day window, underscoring why tracking this deadline closely matters.

Refunds on Excise Tax Paid on Stockpiled Goods

Businesses may also be eligible for a refund of excise tax paid on stockpiled products, excise products produced or imported but not yet sold or used. To be eligible, the stockpiled goods must be destroyed, and businesses must provide documentation proving the destruction, including the production or import declaration, the destruction certificate, and any other relevant documents.

Refunds on Excise Tax Paid on Goods Destroyed Due to Natural Disasters

In the event of a natural disaster such as a flood, fire, or earthquake, businesses may be eligible for a refund of excise tax paid on products destroyed as a result. Businesses must provide documentation proving the destruction was caused by the natural disaster, submitting the following to the FTA:

• Declaration form for damaged or destroyed products
• Proof of payment of excise tax
• Customs declaration for the products
• Supporting documents, such as a police report or insurance claim

Tax-Free Scheme Refund

A tax-free scheme refund is available for excise tax paid on products sold to diplomats or members of armed forces stationed in the UAE. To claim this refund:

• The products must be sold to diplomats or members of the armed forces stationed in the UAE
• The products must be subject to excise tax
• The supplier must provide evidence that the goods were sold to a diplomat or a member of the armed forces stationed in the UAE

Frequently Asked Questions (FAQs)

How Farahat & Co. Can Help

Farahat & Co., a leading Tax Firm in UAE, helps businesses identify eligible excise tax refund scenarios, prepare supporting documentation, and submit claims to the FTA accurately and on time.

Contact Farahat & Co. today to discuss your excise tax refund requirements.