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Everything you need to know about the excise tax law in the UAE

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The businesses in Dubai, UAE have been presented with the opportunity to operate at the international level through the evolution of globalization. The business transactions that occur at the international level comprise a variety of import and export activities that are taxable. There are several taxes that are imposed on these goods that are imported and exported to various countries across the world.

One of the taxes that are imposed on these goods is the excise tax in Dubai, UAE that is applicable to the things that are supplied in limited quantities. These services and goods can be availed only after the registration under the excise tax rules as per the laws of the country. The goods that are included in the excise tax laws include the tobacco products, carbonated soft drinks, fuel products, and some other special-purpose goods that have been found to have adverse influence the human health.

Important Aspects of Excise Tax in Dubai, UAE

The excise tax though is ultimately paid by the consumers is charged at an early stage in the supply chain. The following listed are some of the important features of the excise tax laws that are imposed on the limited goods:

  • It is applicable to some special goods.
  • It is generally imposed on the consumption goods.
  • This tax is usually collected by the business for the interest of the tax authority.
  • It is either imposed at the time of the production or at the time of the import of these products.

Excise Tax Registration in Dubai

The Federal tax authority of Dubai put the excise tax law into action in the year of 2017. The business registration for the excise law could be done through the e-service section that is there on the federal tax authority’s official website. The registration needs the submission of a few documents that are necessary for the taxation number to be generated for the business. The excise tax rates for some of the goods in the Dubai are given in the table below:

Tobacco Products 100%
Carbonated Drinks 50%
Energy Drinks 100%

 

The excise tax law registration is mandatory for the businesses that involve the dealing with the special goods that are registered under the excise law, and this includes the importers, warehouse keepers, producers, stock pilers, etc. of these special goods.

There are two methods through which the excise taxes get charged: specific excise tax, and the ad-valorem excise tax. In the specific excise tax, the tax is charged as per the quantity of the good ignoring the price and the weight of the good. On the other hand, the Ad-Valorem excise tax is charged based on the percentage value of the good.

There are some important documents that are necessary for the registration of the business under the excise tax law. The list of the important documents is given below:

  • Trade license
  • Emirates ID
  • Business activity-related information
  • Certificate of Incorporation
  • Custom number issued by the custom department
  • Declaration
  • Authorized signatory documents
  • Articles of Association
  • Bank account details
  • Partnership agreement
  • Passport of the owner, manager, and senior management

Registration Process for Excise Tax in Dubai

The registration for the excise tax is an essential step for the businesses that deal with the import, export, storage, production, etc. of the special goods. This could be done online on the FTA website. The following steps must be followed to register the business for the excise tax law in the Dubai:

  • Creation of an account on the Federal Tax Authority’s Portal.
  • Activation of the account using the link
  • Login to the account to access the ‘Registration for Excise law’ link.
  • Filling the form with the necessary details.
  • Provide the necessary information regarding the business and the related activities that have been asked for.
  • Submit this form and wait for the approval from the Federal Tax Authority.

Excise Tax Approval Stages in Dubai, UAE

There are various steps that are involved in getting the approval of the FTA to carry out the dealing of the excise tax law goods. The following stages summarize the process of approval or rejection of an application for the excise tax law:

  • Drafting: This refers to the time when the registration form has not been submitted, and the process is under the drafting stage.
  • Processing: This is the time when the application has been submitted by the business and is awaiting the processing to start.
  • Rejection: This is the stage where the registration is declined due to any given reason that did not make the registration appeal worthy of being approved.
  • Approved: This is when the registration is approved by the authority, and the business shall proceed with the excise goods dealing.

Excise tax is a complicated topic that needs careful compliance at all stages. If you are facing any issues with excise tax registration or accounting in the Dubai, then your best option is to avail the services of accounting professionals in the Dubai. With their in-depth knowledge and superior skills, they can help you take care of this complicated process with ease.

For enquiries, call +971 5679 52590 / E-mail: info@aviaanaccounting.com

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