EXCISE TAX SERVICES
Excise tax in the UAE
Excise tax in the UAE is a form of indirect tax levied on specific goods that are considered to be harmful to individuals’ health or the environment. It was introduced as part of the government’s efforts to promote public health and reduce the consumption of harmful products. Excise tax is applicable to various goods such as tobacco products, energy drinks, carbonated drinks, and certain luxury goods.
The excise tax rates vary depending on the type of goods. For example, tobacco products and energy drinks have higher tax rates compared to carbonated drinks. The tax is typically calculated as a percentage of the retail selling price or a specific amount per unit of the product.
Businesses involved in the production, import, or sale of excise goods are required to register for excise tax and comply with the regulations set by the Federal Tax Authority (FTA). This includes maintaining proper records, filing tax returns, and paying the applicable tax on time.
Goods subject to excise tax in UAE.
Excise tax in the UAE is imposed on various goods that are considered harmful or non-essential. The main goods subject to excise tax include:
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Tobacco Products: This includes cigarettes, cigars, and other tobacco-based products.
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Energy Drinks: Beverages that contain stimulants like caffeine or taurine fall under the category of energy drinks.
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Carbonated Drinks: Non-alcoholic beverages with added sugar or sweeteners, including carbonated soft drinks, are subject to excise tax.
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Sweetened Drinks: Any beverages with added sugar or sweeteners, excluding milk and dairy substitutes, are subject to excise tax.
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Electronic Smoking Devices: Excise tax is imposed on electronic smoking devices, commonly known as e-cigarettes or vaping devices.
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Certain Luxury Goods: Specific luxury goods, such as vehicles, jewelry, and electronic devices, may also be subject to excise tax.
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Excise tax exempted products!
The UAE Excise Tax regime includes a list of products that are exempt from excise tax. These products are deemed to be essential or have a low impact on public health. The following are some examples of excise tax exclusion products in the UAE:
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Essential Food Items: Basic food items such as fresh fruits, vegetables, meat, fish, poultry, rice, bread, and other essential food staples are excluded from excise tax.
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Water: Drinking water, both packaged and bottled, is exempt from excise tax.
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Medicines and Medical Equipment: Prescription medicines, over-the-counter drugs, and medical equipment used for healthcare purposes are not subject to excise tax.
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Educational Materials: Books, textbooks, and educational materials required for learning and educational purposes are excluded from excise tax.
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Baby Formula: Infant formula and other baby food products designed for infants and young children are exempt from excise tax.
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Health Supplements: Certain health supplements, including vitamins, minerals, and dietary supplements, are excluded from excise tax.
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Who should register for Excise Tax?
In the UAE, businesses engaged in the production, importation, or release of excise goods are required to register for Excise Tax. The following entities should consider registering for UAE Excise Tax:
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Producers: Any business involved in manufacturing or producing excise goods within the UAE is required to register for Excise Tax. This includes companies that produce goods such as tobacco products, carbonated beverages, and energy drinks.
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Importers: Businesses that import excise goods into the UAE for sale or consumption are also obligated to register for Excise Tax. Importers need to ensure compliance with Excise Tax regulations when bringing excise goods into the country.
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Release Agents: Entities responsible for releasing excise goods from designated areas, such as customs warehouses or free zones, into the local market for consumption or sale must register for Excise Tax. These release agents act as intermediaries between the imported goods and the local market.
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