Globalization has opened gates for businesses to carry their businesses internationally. The business transactions result in the import and export of goods and services during the process. Now, several types of taxes are levied on these goods. One such type is the excise tax.
It is a tax levied on the import of limited goods that are harmful to human health. To avail of these services, an excise tax registration needs to be done as per the law and there is where the need for excise tax registration services in Dubai comes into place.
We at Unicorn Global Solutions are experienced professionals that can help you with all your Excise Tax Registration Services. Text us on WhatsApp or call us today .
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Under UAE Federal Decree Law No. 7 of 2017 on Excise Tax, businesses are required to register for excise tax if they are engaged in:
- Importing excise goods into the UAE.
- Producing excise goods for consumption in the UAE.
- Entities involved in the stockpiling of excise goods in the UAE
- Warehouse keepers responsible for overseeing excise warehouses or designated zones.
The mandatory registration threshold for excise tax in the UAE is AED 375,000. However, this threshold does not apply to foreign businesses.
Excise tax in the UAE is calculated based on the designated retail selling price of a product before the tax is applied. This price serves as the tax base. The excise tax rate is then applied to this tax base to determine the amount of excise tax due. For example, if the excise tax rate is 50%, then the excise tax amount would be 50% of the tax base.
Regardless of quantity, individuals conducting any of the following activities in the UAE are required to register for Excise Tax:
- Producing excise goods in the UAE as part of their business operations.
- Importing excise goods into the UAE.
- Releasing excise goods from an Excise Tax designated zone.
- Stockpiling excise goods in the UAE as part of their business operations.
Excise tax is an indirect tax levied on specific items, typically those deemed hazardous to health or the environment. Its primary aim is to discourage consumption of these goods while providing revenue for essential public services. Federal Decree-Law No. (7) of 2017 introduced excise tax in the UAE, effective from October 1, 2017
Excise goods encompass carbonated beverages, energy drinks, and tobacco products.
Carbonated drinks include aerated beverages except for unflavored aerated water, as well as concentrates, powders, gels, or other extracts that can be made into aerated beverages. Energy drinks are those marketed as such and containing stimulant substances like caffeine, ginseng, taurine, and guarana, along with similar ingredients with comparable effects. Tobacco and tobacco products are also subject to excise tax.
Here are the excise tax rates in the UAE
Carbonated drinks – 50%
Energy drinks – 100%
Tobacco – 100%
Failure to register for excise tax on time may result in an administrative penalty of AED 20,000.
If you are no longer liable for excise tax due to cessation of relevant activities, you have the option to deregister. However, late deregistration may incur penalties of AED 10,000.
Excise tax is applicable in the following scenarios:
The registration process for excise tax involves the following steps:
Contact Unicorn Global Solutions to register for excise tax with our trusted team of professionals so that you can focus on building and growing your business.
