EXCISE TAX IN THE UAE

Excise tax is the indirect tax levied on certain goods that are considered to be harmful to the health of human beings. The objective behind the introduction of the excise tax in the UAE is to reduce their consumption so that it promotes a healthy lifestyle in the nation. Excise tax in the UAE will only be applicable to specific goods which are either imported or produced within the UAE or stockpiled in the UAE for business purposes.

The specific goods on which the excise tax in UAE will be levied are:

• Tobacco and tobacco products
• Liquids used in smoking devices
• Electronic smoking devices
• Carbonated, sweetened and energy drinks

Any person who is an importer, producer, stockpiler, warehouse keeper and who releases goods from excise tax designated zones will be treated as a taxable person under the excise tax law in the UAE. As excise tax is an indirect tax, it will lead to an increase in the price paid by the consumers at the purchase of specific goods which are defined as the excise goods under the excise tax in the UAE.

Registration for excise tax in the UAE: All the taxable persons under the excise law in the UAE are required to submit the tax returns with the FTA and pay the excise tax also. The taxable persons who are involved in the dealing of the excise goods and continue to have an intention in dealing with the above goods should register themselves under the excise tax in the UAE. The person involved in the excise goods should notify the Federal Tax Authority within 30 days of the end of the month in which they were involved or had an intention to be involved in dealing with the excise goods.

A person who was involved in one time importing of the excise goods will be exempt from getting himself registered and filing the excise returns as per the excise tax law in the UAE. However, this exemption under the excise tax in the UAE doesn’t exempt him/her from paying the excise duty on the excise goods brought in (import) in the UAE.

To get the businesses to register for excise tax in the UAE, the excise tax service portal is available on the Federal Tax Authority’s website. ARC associates provide their services for getting businesses registered for the excise tax in the UAE.

Failure in getting the business registered for the excise tax in the UAE may lead to a penalty for violating the excise tax law in the UAE and the FTA would also recover the unpaid excise tax.

Refundable tax under the excise tax in the UAE: As per the excise tax law in the UAE, the excise tax that has already been paid on the excise goods will be refunded by the Federal Tax Authority to the taxable persons under the excise tax law in the UAE in the below-mentioned cases:

• The excise tax was paid on the export of the excise goods. As these exported excise goods are consumed outside the UAE, these are not charged to excise tax in the UAE.
• When an excise good is purchased for the production of another excise good. In this case, the excise tax paid on the purchase of the excise good will be refundable by the FTA and the excise tax will be charged on the newly produced excise good.
• Amounts paid in excess to FTA by error. Any extra amount paid as an excise tax in UAE will be refundable by the FTA if sufficient evidence is provided by the taxable person.

Excise tax returns under the excise tax in the UAE: Every taxable person is required to file the excise tax returns for the tax period which is defined as 30 days period under the excise tax in the UAE. The due date for filing the excise tax returns in the UAE is the 15th of the month following the end of the tax period.

Tax Audit under the excise tax in the UAE: The FTA can perform the tax audit for any business so as to access their excise tax liability. For this excise tax audit purpose, the taxable person needs to present all the required documents managed by them in order to provide a truthful position of the business.

ARC Associates is one of the leading consultants and advisors that provide all guidance and information related to excise tax in the UAE. With highly qualified professionals and experts, all the queries related to excise tax in the UAE are skillfully handled and it helps businesses to avoid hefty fines and penalties implemented in case of violation of excise tax law in UAE.