Excise tax service in Dubai
An excise tax is a tax on the use or consumption of certain products. Excise taxes (sometimes called "duties") are sometimes included in the price of a product, such as motor fuels, cigarettes, and alcohol. Excise taxes may also be imposed on some activities, like gambling. Excise taxes may be imposed by the federal government or by a state. Excise tax was introduced across the UAE in 2017. Excise tax is a form of indirect tax levied on specific goods which are typically harmful to human health or the environment. These goods are referred to as “excise goods”.
The UAE Government is levying excise tax to reduce consumption of unhealthy and harmful commodities while also raising revenues for the government that can be spent on beneficial public services. Consumers will need to pay more for goods that are harmful to human health or the environment. Tax is a compulsory contribution that citizens of any country must make to the government so that they can provide essential public services. This applies to both citizens and expatriates. The business transaction process leads to the import and export of goods and services. Now, there are several types of taxes on these goods. One such type is the excise tax. This is a tax imposed on imports of limited goods that are detrimental to human health. Excise taxes are imposed on certain products, services, and activities like cigarettes, gasoline, and gambling. Businesses must collect these taxes from payees and keep records of these payments.
When considering whether a product is an excise good, the following definitions apply:
- Carbonated drinks include any aerated beverage except for unflavored aerated water. Also considered to be carbonated drinks are any concentrations, powder, gel, or extracts intended to be made into an aerated beverage.
- Energy drinks include any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that provide mental and physical stimulation, which includes without limitation: caffeine, taurine, ginseng and guarana. This also includes any substance that has an identical or similar effect as the aforementioned substances. Also considered to be energy drinks are any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink.
- Tobacco and tobacco products include all items listed within Schedule 24 of the GCC Common Customs Tariff.
- Electronic smoking devices and tools
- Fluids used in electronic smoking devices and tools
- Sweetened drinks
Who has to register for excise tax?
As per the UAE Federal Decree Law Excise Tax, registering for excise tax is the responsibility of any business engaged in:
- Excise goods importing in the UAE
- Excise goods production where they are released for consumption in the UAE
- The stockpiling of excise goods in the UAE in certain cases
- Anyone who is responsible for managing an excise storehouse or designated storage space
There is no registration threshold for excise tax. Hence any corporation involved in any of the abovementioned activities should register and account for excise tax.
Excise tax compliance services:
- Help with Excise Tax Registration
- De-registration services for Excise Tax
- Identify the product listing
- Classify the type of registration required
- Provide advice on inventory counting
- Help with excise duty calculation
- Advice to warehouse owners and stockpilers
- Help with excise duty return filing
- Provide compliance services
Tax Compliance and Penalties:
- FTA has the authority to conduct audits of taxable businesses and then impose penalties on those that do not comply with the law.
- FTA’s database is linked directly to the customs department and the taxable items under the excise list have item codes that can be easily identified.
- Following the implementation of excise duties on the newly added items, importers will not be able to clear any of the taxable items through customs if they are not registered with the FTA.
- The failure to register for excise duties within the deadline invites a penalty of Dh20,000
- The failure to register excess existing stocks of taxable items as of December 1, 2019, ahead of January 15, 2020, could invite a penalty of Dh20,000.
Documents Required for Excise TAX
An applicant registering for excise tax should provide the following:
- Details of the applicant (name / legal type / other legal details)
- Contact Details
- Banking information
- Business Activity & related information
- Customs Registration details
Benefits of Excise Tax Registration in the UAE:
- Allows you to carry on business in the UAE while dealing with excise goods
- Helps ensure that you maintain compliance and stay on the right side of the law
- Gives your business more credibility and transparency