Excise Tax Registration

Excise Tax Registration

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.

From 1 December 2019, excise tax will be levied also on

1. electronic smoking devices and tools
2. liquids used in such devices and tools
3. sweetened drinks

Rate of excise tax

According to Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price, the rate of excise tax is as follows

1. 50% on carbonated drinks
2. 100% on tobacco products
3. 100% on energy drinks
4. 100% on electronic smoking devices
5. 100% on liquids used in such devices and tools
6. 50% on any product with added sugar or other sweeteners

Businesses required to register for excise tax

Under the UAE Federal Decree Law No. 7 of 2017 on Excise Tax, registering for excise tax is the responsibility of any business engaged in

1. the import of excise goods into the UAE
2. the production of excise goods where they are released for consumption in the UAE
3. the stockpiling of excise goods in the UAE in certain cases
4. anyone who is responsible for overseeing an excise warehouse or designated zone i.e. a warehouse keeper
5. FTA is committed to providing extensive support and guidance to assist with this; however, the responsibility lies with the business to make sure that any required compliance obligations are fulfilled
6. FTA has the power to conduct audits of taxable corporates and subsequently impose penal measures on those that do not comply with the law

Excise Tax Registration

1. Open the registration portal on the FTA website and create your user account
2. Verify your details and activate your account using the link sent to your registered email id
3. Log in to the FTA portal using your credentials and navigate to the excise tax registration form
4. Complete the form and check that all of the details are correct. Click submit to send the form to the FTA

After approving your application, the FTA will notify you of your new Tax Registration Number

Documents required for excise tax registration

You will need to provide several documents during registration to authenticate your information. The supporting documents required are

1. Passport copy
2. Emirates ID
3. Trade license
4. Any other official records that entitle the business to administer activities within the UAE

Business details required for registration

1. The role in which you are registering for excise tax (producer, importer, etc).
2. Details of the excise goods with which the business is involved
3. Details of your Customs Authority registration, if applicable
4. If you are registered for excise tax in another GCC State, provide the TRN for that GCC state

FILING EXCISE TAX RETURNS

Once you have registered for Excise Tax, you are required to file your Excise Tax return by the 15th day following the end of each tax period

Digital Tax Stamps Scheme for Tobacco Products

The DTS is a newly introduced control scheme requiring tobacco manufacturers and stakeholders to comply with enhanced standards for the importation and trading of tobacco in the UAE. DTS delivers unique pack marking and encoding to allow product trace-ability from the point of manufacturing through to the final Emirate of distribution, and to support enforcement activity targeting the reduction in illicit tobacco trading. The DTS scheme will require manufacturers to apply specific high security control markers (stamps) and codes to all packs, with the principle aim of the DTS scheme being

Industries required to register

1. Manufacturers
2. Importers
3. Distributors / Supply Chain Agents/ Warehouse keepers Courtesy: Federal Tax Authority