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Excise Tax Registeration

In the UAE, the excise tax was imposed on tobacco and tobacco products, energy drinks, and carbonated drinks. The nation had chosen to levy an excise tax on all e-cigarettes, e-liquids, and sweetened beverages that signed and ratified this January. With this implementation, a substantial change has been observed in firms that produce, supply, or export them.

The Federal Tax Authority of UAE has made an effort and declared an entirely new registration procedure and has called on concerned businesses to register their products on the FTA’s system.

Accordingly, the Tax is applied as follow:

  1. An Excise Tax of 100% is levied on all the tobacco products. All the electronic smoking devices and equipment, as well as all the liquids used in the electronic smoking devices, regardless of the nicotine content.
  2. An Excise Tax 50% will be levied on any product with added sugar or other sweeteners, which may or may not be in the form of beverages. It could even be in the form of concentrate, powder, extract, or any product that might be converted into a drink.

Rate of excise tax

According to Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price, the excise tax rate is as follows:

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

Businesses required to register for excise tax

Under the UAE Federal Decree-Law No. 7 of 2017 on Excise Tax, registering for excise tax is the responsibility of any business engaged in:

  • 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 some instances
  • anyone responsible for overseeing an excise warehouse or designated zone i.e., a warehouse keeper.

Importers, producers, Stock pilers, warehouse keepers, etc. that deal with electronic smoking devices and liquids that are used in such tools along with sweetened drinks need to register to Excise Tax system. Failure in registering within the specified period can lead to fines and various other obstacles.

Businesses are required to monitor further Excise tax developments on Standards and Procedures for implementing the Tax on the products.

AM Audit will be glad to help you with any queries regarding your business.