Excise Tax Consultation
Excise Tax Consultation
The United Arab Emirates (UAE) first introduced the excise tax in the country in the year 2017 under the Federal Decree Law no. 7. According to the law, excise tax UAE applies to businesses involved in the stockpiling, manufacturing, and importing of excise goods. Excise goods are those goods that pose a threat to the environment or human health in general. It is a type of indirect taxation and the rates are different for different excise goods.
What are Taxable Excise goods?
Look at the following instances to know what product falls under the category of excise goods;
- Tobacco and its Products: All products that contain tobacco and tobacco itself are excise goods.
- Energy Drinks: Energy drinks are defined as any type of drink that is promoted or offered for sale as such and contains stimulant compounds that give both physical and mental excitement, such as guarana, ginseng, taurine, caffeine, etc. This covers every compound that has the same or comparable impact as the previously mentioned compounds. Any dosages, extracts, gels, or powders designed to be formed into an energy drink are also termed energy drinks.
- Carbonated Drinks: Carbonated drinks encompass all aerated drinks excluding unflavoured aerated water. Carbonated beverages also include any dosages, extracts, gels, or powders that are meant to be converted into an aerated beverage.
- Others: Sweetened drinks, electronic smoking tools, and devices and liquids used in such devices are all considered excise goods.
What are Excise Tax Rates in UAE?
Following are the excise tax rates by the Cabinet decision no. 52 of 2019 on excise goods, excise tax rates, and the methods of calculating the excise price;
- Fifty percent excise tax on all products with sweeteners or sugar added to it.
- A hundred percent excise tax on electronic smoking devices
- Hundred percent excise tax on liquids used in electronic smoking devices.
- Hundred percent excise tax on energy drinks.
- Hundred percent excise tax on tobacco products.
- Fifty percent excise tax on carbonated drinks.
Who is Required to do Excise Tax Registration in UAE?
The following businesses need to register for excise tax according to the Federal Decree-Law No. 7 of 2017;
- Any warehouse person in the UAE who manages and oversees an excise goods designated zone or an excise goods warehouse is subject to registration for excise tax in the UAE.
- Any person who is involved in the stockpiling of excise goods in the UAE is subject to excise tax registration in the UAE.
- Any person who is involved in the making of excise products that will be consumed inside the UAE is subject to excise tax registration in the UAE.
- Any person who is involved in the importing of excise goods in the UAE.
Who is Exempt from Excise Tax in UAE?
Following are exemptions from excise tax as stated in the Decree Law;
- A person who imports excise goods but not regularly can be exempt from excise tax. Such a person has to prove to the authority about his claim to not import excise goods regularly.
- The exempt person as stated above also needs to report to the authority whenever his circumstances change and he feels that he falls under the scope of excise tax.
- A person who exports excise goods from the UAE is also exempt from excise tax in the UAE.
How to do Excise Tax Registration in UAE?
Following are the excise registration criteria for anyone liable to pay excise tax in UAE;
- Any person who falls under the scope of excise tax has to register with the relevant authority within thirty days after the end of the particular month in which the person performed or intends to perform the taxable activities.
- FTA (Federal Tax Authority) has launched an E-services portal where they accept registrations for excise tax. All you have to do is create an account, sign up, and start the registration process.
- Registration can be done any time before starting the production, stocking, or importing of excise goods in UAE.
What is the Deadline for Excise Tax Registration UAE?
There is no particular date or deadline for the registration of excise tax. Any person who intends to perform taxable activities such as production, stocking, or importing of excise products must register with the FTA before starting the process. However, if a person performs taxable activities, he must register within thirty days after the end of the particular month in which the person performed taxable activities. You can also seek assistance from excise tax consultants to know your liabilities correctly.
How to Pay Excise Tax in UAE?
When a person successfully registers for excise tax in UAE, the next step is to pay the excise tax. The excise tax must be paid within fifteen days after the end of every tax period. Emaratax is the online e-services portal launched by the FTA which is mainly used to register, file, or pay excise tax. It offers instructional videos and frequently asked questions to help you utilize the site effectively. Emara Tax connects with the Central Bank of the UAE and UAE PASS to improve the customer experience. The process of registering, filing, or paying excise tax can be done seamlessly with the help of tax consultants in UAE. Submit your excise tax registration application as soon as possible if you are a taxable person.
Conclusively, businesses that are involved in the production, stocking, or importing of excise products or services must contact expert excise tax consultants in the UAE and fulfill their obligations. Expert tax consultants in UAE do your important tasks with great care so that you don’t have to worry.
