The Government of the United Arab Emirates considers the people in the country as the people close to it and wants to take care of everyone. The UAE government has taken up to protect the citizen from any goods which can harm their health by levying taxes on them called the Excise Tax. These taxes will assist in securing the health of the citizen of the country.
Excise tax is a form of indirect tax which is which was levied on specific products with the intention of discouraging their use. The imposition of tax on such products will increase the prices of the said products and will reduce the intent of using them. This tax is levied on the import, export, trading, manufacturing and storing of certain goods such as:
Carbonated drinks include all forms of carbonated and aerated water except pure unflavoured aerated water. The carbonated beverages will also include any concentrations, gels, powders or extracts which are manufactured with the intention into turning in to a carbonated drink or an aerated beverage.
An Excise Rate of 50% will be levied on all carbonated drinks in the United Arab Emirates.
Energy drinks can be defined as beverages that are sold or marketed as products whose consumption will help stimulate a person mentally or physically. The energy drinks will generally include ingredients such as Ginseng, Taurine, Guarana and Caffeine. Energy drinks will also include any extracts, concentrates or powder which could be transformed into an energy drink.
An Excise Rate of 100% will be levied on all types of energy drinks in the United Arab Emirates.
3.Tobacco and related products
Tobacco along with the tobacco-related products which are mentioned in schedule 24 of the GCC Common Customs Tariff will attract Excise Tax.
An Excise Rate of 100% will be levied on tobacco and all tobacco-related products in the United Arab Emirates.
According to the new regulations of the Ministry of Finance (MoF), from 1 December 2019 the excise tax will be applied to some more products which will include the following:
4.Electronic Cigarettes or other devices
E-Cigarettes have recently come into the picture and are slowly the use of these devices are increasing. These smoking devices include all electronic smoking devices and related tools which ultimately act as a nicotine or caffeine delivery system. Some of these devices include Vaporizers (Vapes), E-hookah, E-Cigarettes, and any other nicotine, caffeine or tobacco delivery systems.
An Excise Rate of 100% is levied on any kind of E-Cigarettes or any delivery system n general in the United Arab Emirates.
5.Beverages with sweeteners or added sugar
Beverages with artificial sweeteners or beverages with added sugar are considered under the purview of Excise Tax. Such beverages include beverages that are ready to use and any concentrates, extracts, gels, etc. which can be transformed into a sweetened beverage.
The source of sugar for these drinks includes white sugar, brown sugar, glucose syrup, and artificial sweeteners such as aspartame, neotame, saccharin, etc.
An Excise Rate of 50% is levied on any kind of sweetened beverages in the United Arab Emirates.
6.Liquids or Concentrates which are used in the E-Cigarettes
Liquids that are used in all electronic smoking devices such as e-hookah, vapes, and other instruments will be considered under the purview of Excise Tax in the United Arab Emirates.
An Excise Rate of 100% is levied on any kind of liquids used in the E-Cigarettes or any delivery system in the United Arab Emirates.
Excluded goods under the purview of Excise Tax
There are many good which are exempt from the ambit of Excise Tax in the United Arab Emirates. These goods include:
- Beverages that are ready to drink and consist of at least 75% milk or milk substitute.
- Any baby formula or any baby food.
- Any beverage which is considered as a part of the special dietary requirement as determined under ‘General Requirements for Pre-packaged Foods for Special Dietary Use’.
- Any beverage which is considered as a part of medical use and is mentioned under the heading ‘General Requirement for Handling of Foods for Special Medical Purposes’.
There has been a gradual growth in the number of businesses coming into the country due to the amicable conditions and the agreeable business environment. The upcoming World EXPO 2020, which will be held in Dubai for a duration of 6 months also attracts a number of people in business and entrepreneurs from all over the world.
The businesses coming in the country need to understand the requirements which a company needs to follow to get registered with the Federal Tax Authority (FTA). If you want your business in the UAE to comply with all the government requirements, you can look into the services which are provided by JAXA Chartered Accountants. JAXA is a reputed chartered accountant firm that will take care of all the financial requirements of your company in Dubai. JAXA provides services related to Accounting, Auditing, VAT and Tax related services, etc. To know more about these services, Contact Us. We will be glad to help.