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”. When considering whether a product is an excise good, the following definitions apply:
- Carbonated drinks include any aerated beverage except for unflavoured 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.
On 1 December 2019, excise tax was levied also on:
electronic smoking devices and tools liquids used in such devices and tools sweetened drinks.
Rate of excise tax
50% on carbonated drinks
100% on tobacco products
100% on energy drinks
100% on electronic smoking devices
100% on liquids used in such devices and tools
50% on any product with added sugar or other sweeteners.
Why the excise tax is levied?
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.
Services offered by Becker Advisors Accounting & Taxation
- Registration for excise tax in UAE
- De-registration
- Quick review on the business to identify the product listing and classification.
- Advise on stock/inventory counting and duty calculation
- Advise on stockpilers
- Ongoing Excise tax return filing and compliance services
- Tax Agent
- Excise duty consultancy on latest amendments/updates from Federal Tax Authority (FTA).