Excise Tax Scope Expanded

Excise Tax scope expanded as of 1 December 2019

The expansion of the Excise Tax regime in the United Arab Emirates (UAE) took effect on 1 December 2019. Excise Tax is now applicable in the UAE on the following products (in addition to those originally subject to Excise Tax):

· Sweetened drinks - 50%

· Electronic smoking devices and tools - 100%

· Liquids used in electronic smoking devices and tools - 100%

Businesses which import, produce or stockpile any of the above goods face new compliance and potential registration obligations due to the expansion. Non-compliance with the expanded legislation could have a significant commercial impact (in addition to the risk of penalties), as businesses could face issues clearing shipments of stock at the border if certain compliance obligations are not fulfilled (e.g. registration of new excise goods on the FTA’s portal).

Further, any business holding stock of the above listed products was required to perform a complex two-stage stock- and sales-based calculation on every individual product type within each category of Excise goods by 1 December 2019. The result of this calculation should be included within the Excise Tax return for the December tax period, which should be submitted by 15 January 2020. Businesses are also required to keep audited records of the quantity of such goods held in the 12-month period prior to expansion.

New Products that will be levied excise tax w.e.f. December 1, 2019 :

• Electronic smoking devices and tools and
• Sweetened drinks

STC has a dedicated team of Excise Tax specialists to help you achieve compliance with the expanded Excise Tax regime. This includes assistance with product classification, impact assessments in relation to the new scope of Excise Tax, advice on optimal supply chain structuring, registration support, auditing of stockpiling calculations and reports and Excise Tax advisory/training.

For more information about the expansion of Excise Tax in the UAE and how STC can assist your business with achieving compliance, please contact shlokvat@gmail.com

Disclaimer : Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each article/view/comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate. and is not intended to provide, and should not be relied on for tax or accounting advice.