Excise Tax is an Indirect Tax. The tax liability is passed to the end consumer of goods which are coming under the purview of Excise Tax.
Excise Tax is a consumption based taxation. The goods which are consumed or to be consumed in the UAE are subject to UAE Excise Tax.
Excise Tax is introduced in the UAE on 01 October 2017.
The “Excise Goods” are goods which are typically harmful for the health and environment.
The following items were covered by the excise tax when it was introduced in the United Arab Emirates on October 1, 2017, along with the corresponding tax rate:
The introduction of Excise Tax in the UAE is with the purpose of discouraging the consumption of products which are unhealthy for the mankind.
Federal Decree Law No.7 of 2017 on Excise Tax clarified who all are subject to register under Excise Tax in UAE and comply with the Excise Tax regulations which are;
A business that brings in excise goods to the United Arab Emirates.
The manufacturer of Excise Goods in the UAE.
Those who are doing Stockpiling of Excise Goods.
Those who are warehouse keeper of Excise Goods.
VAT is an indirect tax in the UAE which has a threshold of revenue/turnover for obtaining the registration. Excise Tax registration has no such threshold and anyone who is obligated to register for Excise Tax shall initiate the application through Emaratax portal of Federal Tax Authority. The application for Excise Tax registration shall be initiated at the time of intention to conduct the activity which will be eligible for Excise Tax registration.
Legal documents of the company.
Identification documents of authorized signatory of the entity, shareholders or partners
Business details
List of Excise Goods the entity is dealing.
Bank Account details
Customs registration details, if applicable.
Details of any criminal, civil, or immigration offenses
Excise Tax required to be calculated depend on the Excise Goods, either 50% or 100%, on the retail selling price based on the list published by FTA or at the designated price, whichever is higher
Excise Tax return is required to be filed on a monthly basis. Once the relevant tax period is ended, the tax return needs to be submitted and make tax payment, if any, within 15 days. Excise Tax registration has no such threshold and anyone who is obligated to register for Excise Tax shall initiate the application through Emaratax portal of Federal Tax Authority. The application for Excise Tax registration shall be initiated at the time of intention to conduct the activity which will be eligible for Excise Tax registration.
In case the products which are coming under the definition of Excise Goods are not listed with Federal Tax Authority (FTA), UAE, such products shall apply for listing in the list. Example: - Prototype Electronic Smoking Device.
An Importer dealing with raw tobacco which is for manufacturing purpose of Tobacco products and paid excise tax at the time of importing. After manufacturing the cigarettes using the imported raw tobacco, the excise tax is due again on the finished products. In such cases, the already paid excise tax can get as a refund through application.
The Excise Goods where the tax is already imposed and eventually exported to outside UAE. Since excise tax is a consumption based taxation, the goods which are not consumed in the UAE is not coming under the purview of Excise Tax.
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