Excise Tax

EXCISE TAX in the UAE

Excise Tax is an indirect tax levied by the UAE government on goods that are considered harmful to human health or the environment. The basic reason for implementing Excise Tax is to reduce the consumption of these goods, raising income for the government that can be spent for the public.

Excise Tax in the UAE was initially implemented in the UAE on certain goods with effect from 1st October 2017 through the Excise Tax Federal Decree-Law No. (7) of 2017. Later, with effect from 1st December 2019 few more products were added to the purview of excise tax vide Cabinet Decision No. 52 of 2019. All Taxable entities are entitled to register for Excise Tax in the UAE through the FTA’s online portal.

Goods Subject to UAE Excise Tax

• Carbonated Drinks – Any aerated beverage
• Energy Drink - Any beverage that may contain stimulant substances that provide mental and physical stimulation, which are marketed or sold as an energy drink
• Tobacco and Tobacco Products – All items listed within Schedule 24 of GCC Common Customs Tariff, including electrically heated cigarettes
• Electronic Smoking Devices and Tools – All electronic smoking tools and devices, whether or not containing nicotine or tobacco
• Liquids used in Electronic Smoking Devices and Tools – All liquids used in such devices, whether or not containing nicotine or tobacco
• Sweetened Drinks – Any beverage to which a source of sugar or other sweetener is added, as determined under Standard 148 and Standard 995 of the GCC Standardization Organization

In the case of Carbonated, Energy, and Sweetened drinks, any powder, gel, concentrate, extract, or any other form that can be converted into a beverage is also considered as excisable good.

UAE Excise Tax Exclusions in the Listed Products

• Unflavored Aerated water is excluded from the category of Carbonated Drink
• The following are excluded from the definition of Sweetened Drink-
  a. Drinks containing at least 75 % milk or milk substitutes
  b. Baby formula or baby food
  c. Beverages for special dietary needs or medical uses
• Drinks containing alcohol are excluded from the definition of excisable goods

UAE Excise Tax Rates

Who should register for Excise Tax in the UAE?

The below-mentioned groups are required to register for Excise Tax in the UAE

• Producers of Excise goods.
• Importers of Excise goods.
• Stockpilers of Excise goods.
• Warehouse keepers are responsible for excise goods.

Information and documents required while registering for Excise Tax in the UAE

An applicant while registering for Excise Tax should provide the following:

• Details of the Company along with legal documents
• Authorized Signatory Details and documents
• Bank Account Details
• Business Activity & related information
• Customs Registration details, if applicable
• List of excisable goods with which the company is dealing