Excise Tax
Al-Hisab Tax Consultancy offers premier Excise Tax Services in the UAE, guided by a team of expert consultant’s adept at managing tax assessment, registration, and return filing. We deliver comprehensive support to help you seamlessly integrate into the new tax framework, optimizing efficiency and ensuring thorough management of your corporate tax responsibilities.
What is Excise Tax?
Excise tax in the United Arab Emirates (UAE) is a specific form of indirect tax introduced to regulate the consumption of certain goods deemed harmful to health or the environment. The tax was implemented on October 1, 2017, as part of the UAE’s broader efforts to diversify its revenue sources and encourage healthier lifestyles.
A company involved in the importation, stockpiling, production, or release of excise goods for consumption within the UAE must register for excise tax at the time of these activities. This registration is required to become a taxable person and to account for the excise tax due as per the Federal Tax Authority (FTA) regulations. Similar to other indirect taxes such as VAT, excise tax does not need to be paid at every stage of the transaction. Once the excise tax on the goods has been paid, it satisfies the tax obligation for those goods.
Which goods are subject to Excise Tax and the applicable rates are as follows:
- 100% Energy drinks
- 50% Carbonated drinks
- 50% Sweetened drinks
- 100% Tobacco and tobacco products
- 100% Electronic smoking devices and tools
- 100% Liquids used in electronic smoking devices and tools
When Excise Tax registration is mandatory for business?
There is no minimum threshold for registration. If you start or plan to engage in any of these activities mentioned below, you must register with the Federal Tax Authority (FTA) within 30 days of the end of the month in which the activity began or the intention was formed. Upon registration, the Federal Tax Authority will issue you an Excise Tax Registration Number (TRN).
Excise tax registration is mandatory for a business in the UAE under the following conditions:
- Importation: When the business imports excise goods into the UAE.
- Stockpiling: When the business stores excise goods within the UAE.
- Production: When the business produces excise goods in the UAE.
- Release for Consumption: When the business releases excise goods for consumption in the UAE.
Registration is required regardless of the volume of goods or the scale of operations. The business must notify the Federal Tax Authority (FTA) within 30 days from the end of the month in which the activity commenced or the intention to engage in such activities was established.