The UAE does not levy personal income tax. However, it introduced VAT on 1 January 2018 and excise tax on 1 October 2017.
What is excise tax?
Excise tax was introduced across the UAE on 1 October 2017. Excise tax is a form of indirect tax levied on specific goods which are typically harmful to human health or the environment. The aim of excise tax is to reduce consumption of these commodities, whilst also raising revenues for the government that can be spent on public services (see also “Rates of Excise Tax in the UAE”). These goods are referred to as “excise goods”. When considering whether a product is an excise good, the following definitions apply:
- Carbonated drinks include any aerated beverage except for unflavoured aerated water. Also considered to be carbonated drinks are any concentrations, powders, gels, or extracts intended to be made into an aerated beverage.
- Energy drinks include any beverages which are marketed or sold as an energy drink and contain stimulant substances that provide mental and physical stimulation. This includes, among others: caffeine, taurine, ginseng.
- Tobacco and tobacco products and devices.
- From 1 December 2019: Electronic smoking devices and tools, liquids used in such devices and sweetened drinks.
Businesses required to register for excise tax
Registering for excise tax is the responsibility of any business engaged in (see also “Registration, Cost and Effect of Excise Tax in the UAE”)
- the import of excise goods into the UAE
- the production of excise goods where they are released for consumption in the UAE
- the stockpiling of excise goods in the UAE in certain cases
- anyone who is responsible for overseeing an excise warehouse or designated storage space
There is no registration threshold for excise tax. Therefore, any corporation which intends to be involved in any of the activities listed above must register and account for excise tax, explain the experts from Ecovis.
For further information please contact:
Bayhas Al Kudaimy, Manager – Legal & Advisory, ECOVIS Fuller International CPA (a member of ECOVIS International), Dubai, United Arab Emirates
Ecovis is a leading global consulting firm with its origins in Continental Europe. It has over 7,500 people operating in over 75 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.
The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in the back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments – from preparation in the client’s home country to support in the target country.
In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues.
The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth.
ECOVIS AG Steuerberatungsgesellschaft
Ernst-Reuter-Platz 10
10587 Berlin
Telefon: +49 89 5898-266
Telefax: +49 (30) 310008556
http://www.ecovis.com
ECOVIS AG Steuerberatungsgesellschaft*
Telefon: +49 (89) 5898-266
E-Mail: gudrun.bergdolt@ecovis.com
