Calculation of Retail Selling Price of Excise Goods in the market

UAE's Federal Tax Authority (FTA) has issued  Federal Tax Authority Decision No. 1 of 2021 which highlights the  Mechanism for Calculating the Average Retail Selling Price of Excise Goods in the Market. The following major points are covered :

• Article 1 - Calculation of the Average Retail Selling Price in the Market
• Article 2 - Excise Goods Not Intended for Retail Sale in the State 
• Article 3 - Implementation of the Decision 

Article 1 - Calculation of the Average Retail Selling Price in the Market

1. A Taxable Person shall undertake the following procedures to calculate the Average Retail Selling Price of Excise Goods:-

• Identify the different Retail Selling Prices of the Excise Goods which are charged by the retailer when the Good is sold to consumers.
• Deduct the value of Value Added Tax and Excise Tax. 
• Multiply the total number of units of the Excise Goods by the Retail Selling Price to determine the total revenues.
• Divide the total revenues in the Market e by the total number of units of the Excise Goods sold.
• Multiply the resulting figure.
• Add the resulting figures Add the figures resulting

2. The Taxable Person shall identify the different Retail Selling Prices on the following:

• Where the Taxable Person deals with a maximum of two customers all the different Retail Selling Prices should be identified.
• Where the Taxable Person deals with more than two customers a sample of the Retail Selling Prices representing at least 50% of the total volume of sales should be identified.
• The recommended Selling Price of the Excise Good as specified by the producer should be implemented.

3. Where the Retail Selling Price relates to a period prior to the application of Excise Tax only Value Added Tax included within each Retail Selling Price should be deducted to calculate the tax-exclusive Retail Selling Price.

Article 2 - Excise Goods Not Intended for Retail Sale in the State

1. The Taxable Person shall use the value of the imported Excise Good as a substitute where
   • Exported outside the State
   • used in the production of a new Excise Good
2. The Import value of the Excise Goods shall include the Customs value pursuant. 
3. When Excise Goods are produced for the purpose of being Exported, the Average Retail Selling Price of the Excise Goods should be the price at which they are sold.
4. Where Excise Goods are produced in the State for the purpose of being used in the production of a new Excise Good the Average Retail Selling Price should be the price at which the Goods are designated.
5. The Authority may request the Taxable Person to provide supporting evidence.
6. Where a change of intention arises after Excise Tax has been declared the Taxable Person shall adjust the Excise Price.

Article 3 - Implementation of the Decision

This Decision shall be implemented as of 28th of April 2021.