Excise Tax Penalty in UAE
Excise tax in the UAE is an indirect form of taxation introduced to discourage the consumption of products that are harmful to health or the environment. It aims to support the country’s broader public health and sustainability objectives.
The excise tax is levied on specific goods, including:
- Tobacco and tobacco products -100%
- Carbonated beverages – 50%
- Energy drinks – -100%
- Electronic smoking devices and tools – 100%
- E-liquids used in electronic cigarettes – 100%
Entities involved in the importation, production, or storage of these goods are required to register with the Federal Tax Authority (FTA) and comply with the applicable filing and payment obligations.
When Do Excise Tax Penalties Take Effect?
The FTA can impose penalties when businesses:
- Fail to register for excise tax promptly
- Delay or fail to file tax returns filing
- Understate or misquote tax owing
- Submit incomplete or false information in returns
- Fail to maintain accurate excise-related records
- Fail to remit the owed excise tax within the prescribed period
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Excise Tax Late Penalties in the UAE
The following is a brief overview of the most common penalties as per UAE law:
| Violation | Applicable Fine/Penalty |
|---|---|
| Failure to register for excise tax | AED 20,000 |
| Failure to file the excise tax return on time | AED 1,000 (first offence), AED 2,000 (repeated offence within 24 months) |
| Late payment of the due excise tax | 2% of unpaid tax immediately, plus 4% monthly (up to 300%) |
| Failure to maintain proper records | AED 10,000 for the first instance, AED 20,000 for repetition |
| Submitting false or misleading data | Heavy administrative fines and possible criminal charges |
| Not displaying prices inclusive of excise tax | AED 5,000 or more, depending on severity |
These fines accumulate quickly, so it’s always a better and less costly choice to stay compliant.
How to Stay Clear of Excise Tax Penalties in the UAE
Businesses are advised to do the following:
- Register on Time with the FTA – Every party dealing in excise goods must register before they can start operations.
- File Returns on Time – File returns monthly or quarterly within 15 days from the end of the tax period.
- Pay Taxes Properly – Properly calculate and pay excise tax through approved FTA payment channels.
- Maintain Proper Documentation – Maintain proper records of production, import, and release of excise goods.
- Get a Registered Tax Agent – A registered FTA tax agent ensures compliance and avoids filing mistakes.
We do all this for you at Tax Consultants in Dubai, with minimal room for any costly mistakes.
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How We Keep Your Businesses Penalty-Free
Our experienced tax consultants take care of complete assistance on excise tax registration, return filing, and penalty management.
We help you:
- In registering your company with the FTA correctly
- In timely filing
- In examining and amending previous returns, if needed
- Handling FTA communications and audits
- Stay informed on law updates and fresh compliance guidelines
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Why Tax Consultants Dubai is Trusted?
- FTA-Approved Experts – Our professionals are FTA-approved and have comprehensive knowledge of UAE excise tax legislation.
- Error-Free Submission – We ensure that your returns are precise and compliant every time.
- Penalty Prevention Focus – We proactively monitor filing deadlines and alert clients so that there are no missed deadlines.
- Personalized Tax Service – You could be a small trader or a large-scale producer; we provide services with your needs in focus.
- Reliable Representation – We act on your behalf in FTA audits and inquiries to promote your business interests.
Avoid costly excise tax penalties – stay compliant with expert advice.
To seamlessly register and file for excise in the UAE, businesses are advised to seek the expert services of Tax Consultants Dubai. Contact us today, and we shall be glad to assist you.
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