Excise tax is referred to as a kind of indirect tax charged on specific goods that are found to be harmful to human health or the environment. Such goods include carbonated drinks, energy drinks and tobacco products.
• Carbonated drinks encompass any fizzy beverage excluding the unflavoured aerated water. Also considered to be carbonated drinks are any concentrations, powder, gel, or extracts meant to be transformed into an aerated beverage.
• Energy drinks include any beverages that are marketed, or sold as an energy drink, and contain intoxicating substances that promote 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.
Who should register for Excise Tax in the UAE?
The following given groups must need to register for Excise Tax in the UAE.
• Producers of Excise goods.
• Importers of Excise goods.
• Stockpilers of Excise goods.
• Warehouse keepers responsible for excise goods.
What is the rate of Excise Tax?
The rates of excise tax in the UAE will be:
• 50 per cent for carbonated drinks
• 100 per cent for tobacco products
• 100 per cent for energy drinks.
When will excise tax come into effect?
Excise tax has been launched across the UAE in the fourth quarter of 2017.
By when should I register for Excise Tax?
There is no registration threshold for registration; therefore, any corporation who wants to be involved in any of the activities listed above must register before the date of introduction, i.e. 1 October 2017, and account for excise tax.
What is the main objective behind charging Excise Tax?
The primary objective behind levying excise tax is to bring down the consumption of harmful and injurious commodities while also increasing revenues for the government that can be used on worthy public services.