Excise Tax
What is an excise tax?
An excise tax is a type of indirect tax levied on the sale of a specific item. If these products are imported into the UAE, manufactured in the UAE, or stockpiled in the UAE, they are taxable.
Products that are detrimental to people or the environment are subject to an excise tax. The major goal of the excise tax is to discourage consumption of those specific commodities in order to prevent harmful behaviours.
In some cases, goods will be physically tagged to demonstrate that the excise tax has been paid to the government.
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Which items are subject to excise duty?
- Carbonated drinks: All aerated beverages, with the exception of unflavored aerated water, are carbonated. Concentrates, powders, gels, and extracts utilised in the production of aerated beverages will all be considered excise goods.
- Tobacco and tobacco products
- Energy Drinks: Caffeine, taurine, ginseng, and guarana are examples of energizers that provide mental and physical stimulation. Excise tax applies to any concentrate, powder, gel, or extract used to make an energy drink.
Scope of excise tax
If you engage in the following activities, you must register and pay excise tax:
- Importing excise products.
- Producing or manufacturing excise goods.
- Transferring excise products out of a Designated Zone
- Stockpiling excise goods in the normal course of business.
- Selling excise goods in the UAE. The excise tax will be borne by the seller and the tax amount will be included in the total sale price of the excise product.
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