Excise Tax Consultants in the UAE
Excise tax consultants are providing services in the UAE after launching the excise tax, under the Federal Decree Law No. 7/2017. Excise tax consultants have become a part of the UAE business and taxation measures while dealing with the Excise tax that is a kind of indirect tax charged on such products regarded as hazardous to human health such as tobacco products, carbonated drinks, energy drinks among others.The structure of the excise tax is aimed at regulating the production, storage, and import of these products in order to reveal those companies that engage in such activities equalizing their contribution to the public needs through the taxation system. The rates applied depend on the type of goods, which regards the actual level of threat or danger offered by each category. Excise tax consultants aid in the mechanism of the excise tax in the UAE as the tool for reducing the tax liability on the consumption of dangerous products with a negative impact on health and as the instrument for the formation of governmental revenues.
Excise tax consultants Aid In Understanding Taxable Excise Goods:-
Excise goods are distinct articles that are subjected to this special tax since they are deemed unhealthy to the general community as well as the environment. Here is a detailed look at the products that fall under this category:Here is a detailed look at the products that fall under this category:
- Tobacco and Tobacco Products:- Every product made of tobacco and relating to cigarettes, cigars and everything in between, falls under the category of excise goods. This category also consists of raw tobacco as well as any other products that contain tobacco. The given items are subject to a high excise tax rate due to the discouragement of smoking and the ill-effects it has been seen to cause.
- Energy Drinks:- Energy Drinks: Energy drinks can be described as drinks which are advertised or sold as drinks having stimulating substances in them that provide energy. Such compounds are caffeine, taurine, guarana, ginseng among others that are believed to enhance central nervous system stimulation and psychological performance. The tax also comes into effect on any product that can in one way or the other be converted into energy drinks including powders, gels, and concentrates. The reasoning for this measure is the promotion of a healthier population and a decrease in the people’s use of these products associated with health issues.
- Carbonated Drinks:- This category includes all beverages with carbonation but no actual flavoring, discluding plain carbonated water. It includes soda and sparkling juices most of which contain a lot of sugar that has led to multiple health problems like obesity and diabetes. This also covers items that are to be blended or changed into carbonated products such as syrups, concentrates and powders.
Other Excise Goods:- Sweetened beverages are also part of the excise goods and so are the electronic smoking devices and the liquids that go with them. Sodas, filled with sugar or any other products with added sugar are subjected to the tax in order to deter people from developing increasing cases of diabetes and any other complication related to excessive intake of sugar. The electronic smoking devices, for instance electronic cigarettes and the liquids that are used to develop them are also charged highly in taxation with a view of discouraging their use following the many health risks associated with them.
Excise tax rates in the UAE
The procedures relating to the UAE excise tax are provided in the Cabinet Decision No. 52 of 2019 that include the rates for different categories of excise goods,the Excise tax consultants can help to deal with the excise rates that are intended to represent the risks posed by these goods to society, and consequently, people’s actions as given below:-
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- 50% excise tax on sweetened beverages: This tax has to do with any drinks which contain added sugar or sweetening substances and this is fixated on products that are related to poor health due to sugar.
- 100% excise tax on electronic smoking devices
- 100% excise tax on liquids used in electronic smoking devices:
- In the same manner, liquids or refills which are used in the mentioned devices are also highly regarded and are equally subjected to taxation.
- 100% excise tax on energy drinks: Because of their high caffeine intake and the consequences of their intake to health, energy drinks are highly taxed to minimize their intake.
- 100% excise tax on tobacco products: Cigarettes and all items that are related to it, in this process are subjected to the highest tax, so as to warrant the severe health risk that is posed by the smoking habits.
- 50% excise tax on carbonated drinks: This tax is levied on all tactile beverages other than carbonated water that are loaded with sugars in a bid to persuade people to cut on their consumption.These are not only the revenue-generating figures but also the figures designed to discourage the consumers.
Registration Of Businesses for UAE Excise Tax:-
Within the context of the UAE’s excise tax law, multiple categories of enterprises must register for excise tax. This registration obligation applies the directive due to the law regulating the various activities in the production, storage, and importation of excise goods. The following are the key entities that must register:The following are the key entities that must register:
- Warehouse Operators:- Excise tax is mandatory for any business that owns a warehouse, or if you have a designated area for storing excise goods in the UAE.
- Stockpilers of Excise Goods:- Other categories are those industries and businesses who store excise goods, though they themselves do not manufacture or import such goods are also obliged to register. This consists of any company which possesses a large quantity of the excise goods for the purpose of selling or supplying them in the UAE.
- Manufacturers of Excise Goods:- The companies that manufacture excise goods for local consumption in the UAE must pay excise tax and, therefore, register for it. This makes sure that all manufactured local excise goods are recorded.
- Importers of Excise Goods:- It is mandatory for any business that deals in goods that are subjected to excise tax in the UAE to sign up for the tax. This requirement is regardless of the goods for domestic consumption or to be imported to other stores in the UAE.
- Non-registration for excise tax:- If a person prefers not to get registration,it attracts other penalties to any business engaged in any of these activities, it’s then wise for business to be price conscious.
Excise tax exemptions in the UAE:-
Under UAE’s excise tax law, the following are the key exemptions under the law:
- Occasional Importers:- In this case, the regular importer or any other person/ company that imports the goods occasionally can be relieved from paying excise tax. Nevertheless, they have to convince the authorities that their importation activities are exceptional and do not fit under business activity.
- Exporters of Excise Goods:- Any excise goods that are intended for exportation out of the United Arab Emirates do not attract the excise tax. This exemption is aimed at preventing Normal Excise tax from being levied on goods that are not used locally in the UAE hence leading to extra taxation.Nevertheless, to benefit from these exemptions, the companies are still required to submit their transactions and reports to the FTA and such documentation as may be required to substantiate the exemptions.
What Is the Procedure To Get Register for UAE Excise Tax?
Excise tax registration in the UAE can be done with the assistance of Excise tax consultants that doesn’t not take much of the time.The Excise tax consultants can help the taxpayer to pays much attention to some of the things to look out for registration:-
- Understand Your Obligations:- The taxpayer should understand the excise tax law before registering hence the need for businesses to be well informed. This entails establishing whether their operations are regulated by the law and pronouncing on the excise goods that they trade in.
- Register via the Emaratax Portal:- The FTA also offers an e-services portal namely; Emaratax, that enables entities to register for excise tax. Application process is easy and applicants follow it through the registration process provided on the portal. It involves the process of signing in the business, general forms that are required to be filled in order to establish the account.
- Provide Required Information:- During registration, legal entities are obliged to submit information referring to the kinds of excise goods they work with, the types of business they perform, the places of their facilities, etc. In this case, there is a need to ensure all aspects of information provided are correct and refreshed for the current state.
- Submit Supporting Documents:- In most cases, the registration application may be accompanied by other relevant documents depending on the nature of the business. This may be related to such items as licenses, permits or proof of ownership of warehouses and /or manufacturing facilities.
- Registration Timeline:- Any business entity involved in excise activities must first be licensed by registering with the commissioner of excise tax before engaging in any of the activities of manufacturing or importing any excise goods or even keeping a stockpile of the excise goods. Where a business carries out taxable activities inconsistent with registration, he must register within thirty days of the end of the month in which he started to carry on the activities aforesaid.
Excise Tax Registration Deadline:- The writing and recording of the UAE’s excise tax law does not contain any explicit time frame, which businesses need to adhere to. But entities need to first get registered before they conduct any kind of business that is chargeable of tax. For those who have already embarked on such activities, registration has to be done not later than 30 days from the end of the calendar month in which the activities are conducted. This undertaking rolling deadline gives adequate time to the businessmen to comply with the law while at the same time putting a lot of pressure on the businessmen to register within the period provided.
Paying excise tax in the UAE
After registration, the businesses are required to fulfill all the payment of their excise taxes. The payment process is as follows:-
- Determine the Tax Period:- Excise tax is commonly computed on a tax base and may refer to a particular tax period normally being a calendar month. From this period, businesses need to be extremely diligent in recording all the taxable activities.
- Calculate the Tax Owed:- The measurable amount of the tax that should be paid is calculated by comparing the kind and quantity of excise goods that were dealt within the period of time set by the excise tax regulations. Appropriate tax rate has to be applied to the goods to come up with the total amount of tax to be paid.
- File the Tax Return:- Excise taxes are paid based on the amount that is owed, where companies must then complete an excise tax return through Emaratax. This must be done within the first 15 days of the subsequent tax period immediately following the previous tax period in question.
- Pay the Tax:- The payment of the excise tax has to be done within the 15-day foreign of the end of the tax period. Firms can remit the taxes online through the Emaratax platform which is linked to the United Arab Emirates Central Bank and the UAE PASS for payments.
- Seek Assistance if Needed:- Considering all the factors around excise tax compliance regimes, firms can seek professional advice from UAE’s Excise tax consultants who assist clients in a number of areas, which range from the preparation of the returns right up to the computation of tax amounts owed and the fulfillment of every lawful obligation.
Excise tax is another crucial component that forms the UAE tax structure with the primary objectives of reducing the consumption of socially unacceptable products as well as act as a source of the government’s revenue. Manufacturers, storers, and importers of excise goods need to fully understand the requirements of the excise tax laws, whereby one needs to register with the ITA and pay the right taxes at the right time. The assistance of the Excise tax consultants in the field of excise tax will help the businesses to manage their liabilities in the sphere of taxation and meet the requirements of the UAE legislation without distractions from the main activities.