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Are businesses ready to tackle excise tax in UAE?

Posted on 30 September 2017 Author: Published in: Business Setup Published by: Shuraa Business Setup

Welcoming the fourth quarter of the year, Federal National Council implied the UAE excise tax, in the series of the various scheduled UAE taxes. Excise tax in UAE is mainly applied on commodities that negatively impact the environment as well as health. Some of the products that are subjected to the UAE excise tax are tobacco, energy drinks, fizzy drinks, etc. These commodities are charged with taxes from 50 percent to 100 percent. UAE excise tax or the law regulating taxation projected by the government is set to create a revenue stream to boost the resources of the country. The good part is these resources will be used to strengthen, diversify and secure the nation’s economic development, leading to sustainably scope for the enterprises and businesses in UAE.

Nevertheless, UAE excise taxes that are applied to manufactured goods and not saleable goods may directly or indirectly affect various businesses in UAE and the best measure to consider is to create awareness and understand the law thoroughly.

Here are some of the questions that can help commercial entities and UAE businesses tackle excise tax in UAE:

When was excise tax introduced? 

According to the Federal Tax Authority, UAE Excise Tax will be introduced in the fourth quarter of 2017 and was accounted to be applied from the 1 October 2017.

Which industries in the UAE excise tax applied on?

UAE excise tax is applied on specific trading products that are mainly considered bad for health and the environment or even on products that show negative effects in the body such as caffeine and aerated drinks. Nevertheless, tax marking of certain other goods will be taken place in the later stage.

Under what occasion will the UAE excise tax be chargeable?

Under the products listed – the manufacturing of those products, import, storage and logistics of the products and well as the release of the excisable goods from a particular jurisdiction could charge excise tax in UAE. However, export of excisable goods has an exemption, as well as there, are several refunds you can apply for under the UAE Excise Tax Law.

Which commercial jurisdiction or zones will UAE excise tax be charged?

UAE provides jurisdiction benefits in the terms of freezones and offshores in UAE. Likewise, excise tax as well is charged in these jurisdictions neither on the manufacturing of excisable goods nor on storage or transportation between these jurisdictions. However, excise will be charged only when the subjected goods that are distributed in the local market.

Is it essential to file returns on paying excise taxes in UAE?

It is mandatory to file returns on intervals as mentioned under the UAE Excise Tax Law and meet the deadlines and requirements according to the executive regulations. Also, the UAE Excise Tax Law guarded by the UAE Federal Law No. (7) of 2017 on Tax Procedures denotes several administration duties and penalties on tax invasion, that must be studied and followed duly.

 

Is your business ready to tackle the introduction to UAE excise tax? Or are you sure that excise tax will not be levied on your business, to find out speak to our professional business consultants at Shuraa Business Setup. Shuraa Business Setup is a leading business setup service providers and helps you through the various obligations and duties that come along a business in UAE. For more details, drop in a quick inquiry or call us.


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