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How to File and Pay Excise Tax in the UAE

The UAE government introduced the excise tax in 2017 as part of its efforts to diversify its revenue sources and discourage the consumption of goods that are harmful to human health or the environment. The excise tax in UAE is an indirect tax that applies to different categories of products/goods, for instance, electronic devices for smoking, products made by tobacco, carbonated and energy drinks, liquids used in electronic devices for smoking, artificial sugar products, and other such sweeteners. The Recently issued Cabinet Decision No. 108/2023 to make certain amendments in some provisions of the Federal Law-Decree No. 7/2017 on UAE Excise Tax effective from 1st December 2023.

The Amendments in the UAE Excise Tax: –

The amendments aim to address some of the challenges faced by the business community impacted by the excise tax and to provide more clarity and specificity to key concepts and procedures. Some of the main changes include:

  • Excise Goods Definition and Tax Base Criteria: – Discover the criteria for defining excise goods and understanding the factors influencing the excise tax base.
  • Excise Tax Registration Procedures: –Explore the processes involved in registering and deregistering for excise tax, ensuring compliance with regulatory requirements.
  • Importing, Producing, and Releasing Excise Goods: -Navigate through the regulations governing the import, production, and release of excise goods to meet legal obligations.
  • Obligations of Excise Tax Warehouse Keepers: –Understand the duties and responsibilities imposed on warehouse keepers dealing with excise tax, ensuring adherence to regulations.
  • Filing and Paying Excise Tax Procedures: –Learn about the step-by-step procedures for filing excise tax returns and making timely payments through specified methods.
  • Excise Tax Refund Conditions and Mechanisms: –Explore the conditions and mechanisms enabling the claiming of excise tax refunds under established guidelines.
  • Penalties and Fines for Non-Compliance: –Understand the consequences of non-compliance with excise tax laws and regulations, including penalties and fines.

Excise Tax Rates and Scope In UAE

The excise tax rates vary depending on the type of goods, as follows:

– 50% on carbonated drinks

– 100% on tobacco products

– Energy drinks (100%)

– For smoking electronic devices (100%)

– Liquids in smoking electronic tools/devices (100%)

– Sweeteners and other sugar added any product (50%) 

The excise tax is imposed at the point of import or production of the excise goods, or when they are released from a designated zone or an excise warehouse into the UAE market. The businesses that are involved in these activities are required to register for the excise tax and pay it online through the Emaratax portal, which is the official website of the Federal Tax Authority (FTA).

Read more about: Excise Tax Liability in the UAE

Filing and Paying Excise Tax Online: A Step-by-Step Guide 

To efficiently file and pay your excise tax online through the Emaratax portal. Follow the comprehensive steps outlined by the Federal Tax Authority (FTA) guide to ensure a seamless process.

  • Step 1: Secure Login

1.1 Log into the Emara tax portal using your FTA account or UAE ID Pass for a secure and authenticated access.

  • Step 2: Business Setup

2.1 Add your business details and activities to create a comprehensive profile.

  • Step 3: Navigate to Excise Tax

3.1 Click on the Excise Tax section to review declarations for the relevant tax period.

3.2 Declarations are automatically populated based on previous form submissions, covering import, production, release, or deductible excise tax declarations.

  • Step 4: Declare and Confirm

4.1 Declare your excise tax returns accurately.

4.2 Confirm the calculated amount of tax due.

  • Step 5: Secure Payment

5.1 Choose your preferred payment method, such as Magnati Pay or Giban.

5.2 The payment process mirrors the VAT payment system in Emaratax.

Important Deadlines

The filing deadline for excise tax returns and the accompanying payment is 15 days after the conclusion of the respective tax period, typically aligned with a calendar month.

Weekend or Holiday Adjustments

In case the deadline coincides with a weekend or a national holiday, it will automatically shift to the subsequent first working day for your convenience. Follow these steps and deadlines to ensure compliance and efficient handling of your excise tax obligations on the Emaratax portal.

How to Claim Excise Tax Refunds

The FTA also provides refunds for the excess excise tax paid by the businesses, under certain conditions. The businesses can apply for a refund through the Emaratax portal, by submitting the relevant documents and evidence. The FTA will review the refund claim and issue a decision within 20 business days.

How to Access FTA Support and Guidance

The FTA has also issued various guides, references, and public clarifications to help businesses understand their tax obligations and procedures. The FTA also offers an e-learning platform, materials, and interactive video tutorials to educate businesses and the public about the excise tax. The excise tax is one of the key initiatives of the UAE government to enhance its fiscal sustainability and promote healthy and environmentally friendly practices among consumers and businesses. 

 

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Shayan Khan is an experienced Corporate Tax Consultant with over 4 years of expertise. He's skilled in negotiating and investigating taxes with government bodies like the Federal Tax Authority. Shayan excels in reviewing and drafting tax documents and offers strategic advice on complex tax matters. Clients trust his guidance in navigating tax procedures and minimizing liabilities. Read more