UAE Guide: What is Cabinet Decision No. 52 of 2019 by FTA for Abu Dhabi and Dubai?
The United Arab Emirates (UAE) Federal Tax Authority (FTA) has recently published the Cabinet Decision No.52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise price (Cabinet Decision). It announced that Excise Tax will be levied on sweetened drinks, liquids used in electronic smoking devices and tools as well as electronic smoking devices and tools before 1 January 2020. The implementation date of this Cabinet Decision will be announced through another Cabinet Decision.
Who does it apply to?
Businesses which manufacture, import, or have large amounts of the new excise goods stored or stockpiled in their premises in Dubai which could include both registered and unregistered businesses.
When does excise become leviable on new goods?
- Liquids used in Electronic Smoking Devices and Tools – Liquids used in electronic smoking devices and tools include all liquids used in such devices and tools and the like whether or not containing nicotine pursuant to the Customs codes to be determined upon a decision issued by the Minister.
- Electronic Smoking Devices and Tools – Electronic smoking devices and tools shall mean all electronic smoking devices and tools and the like whether or not containing nicotine or tobacco pursuant to the Customs codes to be determined upon a decision issued by the Minister.
- Sweetened Drinks
- Sweetened Drinks shall mean a product to which a source of sugar or other sweetener is added that is produced in any of the following forms a ready-to-drink beverage intended to be used as a drink or Concentrates, powders, gel, extracts or any form that can be converted into a sweetened drink.
- Sugar includes any type of sugar determined under Standard 148 of the GCC Standardization Organization under the heading “Sugar” and any subsequent and relevant standards.
- Sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardization Organization under the heading “Sweeteners Permitted in Food” and any subsequent and relevant standards.
- The following Goods shall be excluded from the definition of sweetened drinks (1) Ready-to-drink beverages containing at least 75% milk, (2) Ready-to-drink beverages containing at least 75% Milk Substitutes, (3) Baby formula, follow up formula or baby food, (4) Beverages consumed for special dietary needs as determined under Standard 654 of the GCC Standardization Organization under the heading “General Requirements for Pre-packaged Foods for Special Dietary Use” and any subsequent and relevant standards and (5) Beverages consumed for medical uses as determined under Standard 1366 of the GCC Standardization Organization under the heading “General Requirements for Handling of Foods for Special Medical Purposes”, and any subsequent and relevant standards.
Rate of Excise Tax in Dubai, Abu Dhabi, Sharjah, UAE
- Sweetened Drinks – 50% of the higher of the price published by the FTA or the designated retail sales price less tax included on sweetened drinks.
- Liquids used in Electronic Smoking Devices & Tools and Electronic Smoking Devices & Tools – 100% of the higher of the price published by the FTA or the designated retail sales prices less tax included on liquids used in electronic smoking devices and tools as well as the devices and tools themselves.
This Cabinet Decision will not come into effect until a separate decision is issued to set a date of implementation as per Article 17 of this Cabinet Decision which states that the new rules could come into effect before 1 January 2020.
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