How To Register For Excise Tax in UAE?

June 15, 2022Dated:  | |

The United Arab Emirates (UAE) considers cigarettes, e-cigarettes, and E-liquids for smoking devices (containing nicotine or tobacco), sweetened beverages, carbonated and energy drinks, or any other concentrates (that contain powder, gel, or extracts that are health hazards) as excise goods. They are liable to excise tax. So carbonated drinks will be dearer by 50%, energy drinks, and tobacco-based products by 100%.

This blog contains all relevant information concerning excise tax and its registration.

What is Excise Tax in UAE?

In support of the UAE Government’s holistic approach to better the health of its residents, the Federal Tax Authority (FTA) introduced the excise tax levy on all excise goods that harm human health, lead to chronic diseases and pollute the environment in 2017. The FTA increased the excise tax rates in 2019 (effective from 2020) to discourage people from buying and consuming such goods.

The excise tax levy will affect the following:

  • Persons who involve themselves in importing excise goods to the UAE.
  • Production and consumption areas of excise goods
  • Stockist of excise goods for trade after excise tax levy came into effect in the UAE.
  • Persons who release excise goods from designated zones (DZ)

Registration of Excise Tax—Procedure

As the FTA does not state a threshold for excise tax, all persons who involve themselves in any action concerning the stocking, production, or import of excise goods in the UAE or release such goods from a DZ must register for excise tax by following the steps listed below:

Create a Service Account

Excise taxpayers must create a service account by:

  • Signing up and creating a username and password
  • The taxpayer will receive a verification email within 24 hours after signing in
  • The taxpayer must verify their email.
  • Finally, log in to the service account using their username and password.

Register for Excise Tax

After the completion of the signing up formalities, taxpayers must register for excise tax payment as follows:

  • After logging in, the taxpayer must click on the ‘register for excise tax’ icon.
  • Taxpayers must fill all the fields marked with a * on the form.
  • After filling up the form, the taxpayer must click on the ‘submit for approval’ icon to submit the registration form for excise tax.

Rectification of Errors on Registration Form

If you have erroneous input on the registration form that you have already submitted, you can make the necessary corrections on the amendable fields by:

  • Clicking on the ‘edit’ icon. 
  • Rectify the incorrect data on editable fields 
  • Click on the ‘submit changes’ icon to save the information to incorporate it immediately.

Penalty for Delay in Registration for Excise Tax

The person liable to pay excise tax in the UAE must pay the tax by the 15th of every month. In case of tax arrears, the defaulters must pay the penalty of 4% for each month from the day the tax was due up to the tax assessment receipt date from the FTA. You can make your penalty payments as follows:

  • Log in to your service account and check the dashboard for the “late registration penalty” tab
  • Look for the ‘pay’ icon and click on it to proceed with the penalty payments.

Conclusion

You would have noticed that most people buy excise goods at duty-free shops at the airport because they are much cheaper there, and it is the excise tax levy that makes them more expensive elsewhere. Excise tax or ‘sin tax’ levy discourages the UAE residents from using products that can be detrimental to their health. 

Taxation in the UAE can be tricky get in touch with Flyingcolour experts to help you with your compliance needs.

Book your free consultation with us to know more about the comprehensive services. 

Write a comment