January 13, 2020

Excise Tax in UAE

Excise tax in UAE - Excise tax rate in UAE

Excise Tax Services in UAE

Excise tax has been implemented in UAE on tobacco products, energy drinks and carbonated drinks. Excise tax in UAE will also be implemented on electronic cigarettes (e-cigarettes), electronic liquids (e-liquids) and many other soft drinks starting from December 1, 2019.

Excise Tax Rate in UAE

Federal Tax Authority (FTA) has announced that UAE will implement 100% excise tax on tobacco products and 50% excise tax on electronic smoking devices and the liquid used in the electronic smoking devices. FTA has recently introduced a new excise registration procedure and has called concerned businesses to register their products on the FTA’s new excise portal. Excise tax will apply as follows:

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

Excise Tax Registration UAE

Businesses which import, manufacture, distribute, or stockpile the following Excise goods should already be registered for Excise Tax and should be giving consideration to the new compliance requirements:

  • Carbonated Beverages
  • Energy Drinks
  • Tobacco and Tobacco Products

Businesses can register for excise tax in UAE through the e-services portal of Federal Tax Authority (FTA) website. There is no registration threshold for excise tax, any business who is involved in any of the activities mentioned above must register and implement excise tax.

excise tax rate

Purpose of Excise Tax

As per Federal Tax Authority (FTA), excise tax will also apply on additional products to brace UAE government’s efforts to promote healthy consumption and environment. Excise tax is levied on the products that are harmful and dangerous for the human health and environment. The purpose of implementing excise tax is to reduce or avoid the consumption of unhealthy products, simultaneously increasing the government revenues that can be used for the development and pubic services.

Business Implementation of Excise tax in UAE

Excise Tax in UAE brings a change to all business that manufacture, trade and import those products.
Businesses must register in excise tax system and implement excise tax in their activities. SAB recommend to start considering the following steps for guidance:

  1. Identify the products that will qualify as Excise Goods 

  2. Review the supply chain flows/transactions with regards to the newly identified Excise Goods, and determine the Tax trigger points and the Tax liability for each flow/transaction;

  3. Determine key requirements for registration as an Excise Tax Taxable Person;

  4. Determine key requirements to apply for a Tax Warehouse and Tax Warehouse Keeper registration (if applicable);

  5. Calculate excess Excise Tax (if any) during the transitional period;

  6. Assess the impact on pricing across the supply chain.

Businesses are urged to monitor further Excise Tax developments including clarifications and guidelines by the FTA on standards and procedures for implementing Excise Tax on the new products.

How SAB can help in implementing Excise Tax in UAE?

SAB Auditing is one of the approved Tax Agents in UAE. SAB is providing following services that will help your business to implement excise tax in your operations smoothly and efficiently. SAB is providing best excise tax and VAT services in Dubai: 

  • Excise Tax Registration
  • De-registration from Excise Tax
  • Quick review on the Entity to identify the product listing and classification for qualifying registration
  • Advise on stock/inventory counting and duty calculation
  • Advise on stockpilers
  • Ongoing Excise duty return filing and compliance services
  • Tax Agent
  • Excise duty consultancy on latest amendments/updates from FTA

SAB is providing all kinds of financial services such as audit services, accounting and bookkeeping services, tax agent services, VAT services, Tax Consultancy and much more. Contact us for assistance.

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