Excise Tax In UAE
Our Excise Tax advisory service in Dubai, Abu Dhabi and the UAE is part of our tax consultancy services in Dubai, Abu Dhabi and the UAE.
Excise Tax is an indirect tax set on specific goods; it is imposed within government policies rather than being an international tax imposed across countries. It is primarily considered as a business tax; a tax paid by the businesses; producers, importers, or an intermediary; and not by the consumer although it usually induces an indirect increase in price for consumers. It can be set and paid as a fixed percentage rate assessed on the value of certain goods referred to as “ad valorem” or as a specific fixed amount.
Excise tax is typically imposed in the country where and at the time when the excise goods are consumed; applied on the retail price affecting the price of the excisable goods for final consumers; thus, referred to as a consumption tax.
In 2017, United Arab Emirates has released its excise tax regulations and rates in aim to reduce consumption of unhealthy commodities while also inducing revenues for the UAE government to be spent on beneficial public services. The implementation and administration of Excise Tax is under the authority of the Federal Tax Authority (FTA).
All businesses that engage in trading and production of the below excise goods are subject to the following excise tax rates:
| Category of Excise Good | Excise Tax Rate |
|---|---|
| Tobacco Products | 100% |
| Soft Drinks | 50% |
| Energy Drinks | 100% |
| Sweetened Drinks | 50% |
| E-Cigarettes | 100% |
| Liquids of e-cigarettes | 100% |
Excise tax is applicable on businesses engaged in the following activities:
- Import of excise goods.
- Production of excise goods that are consumed in the country.
- Hold a stock of excise goods for business purposes in the country.
- Release of excise goods from a designated zone.