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Good News: FTA Issues list of Products Exempted from New Introduced Excise Tax

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  • Good News: FTA Issues list of Products Exempted from New Introduced Excise Tax

To suppress the damaging consumption patterns and improve the standard of life are the leading goals behind the Cabinet’s choice to expand the scope of excise tax UAE.
After coming into effect, consumers who wish to purchase excise goods will be needed to pay the excise tax, in addition to VAT. Manufacturers, importers, and stockpiles of excise goods need to be signed up according to the new system.

What Products exempt from Excise Tax?

1. prepared to drink beverages containing a minimum of 75% milk

2. All set to consume beverages including a minimum of 75% milk substitutes

3. Baby formula or baby food

4. Drinks were taken in for unique dietary needs, as determined under the heading ‘General Requirements for
Prepackaged Foods for Special Dietary Use’ and any subsequent and appropriate standards.

5. Drinks were taken in for medical usages, under the heading ‘General Requirements for Handling of Foods for Special
Medical Purposes’, and any subsequent and appropriate standards.

The UAE Cabinet revealed the decision to expand the list of import tax taxable items to include sweetened beverages, sugary drinks, and electronic smoking cigarettes gadgets, starting from January 1, 2020.

You might have an interest in Requirements of Registering Excise Tax

When do the new tax rates work?
The new excise tax rates will enter into result from Jan 1, 2020, are as follows

Excise Goods Rates
Electronic cigarettes with or without nicotine 100%.
Liquids utilized in electronic cigarettes 100%.
Drinks with included sugar 50%.

The Authority asserted that the new decision is part of the federal government’s constant efforts to promote a healthy way of lives in the UAE community and suppress the spread of illness stemming from the usage of damaging products.

As part of the very first phase of implementation, the FTA has contacted manufacturers, importers, and stockpilers of sweetened drinks with sugarcoated to start signing up excise tax in UAE purposes through the new registration treatment.

The FTA’s registration treatment for excise tax will be divided into 2 stages:

1. The very first stage will be on registration of tax on sweetened drinks.
2. The 2nd will be for registration of electronic cigarette smoking devices and liquids used in the gadgets.

To prevent last-minute registration hold-ups, the Federal Tax Authority has already released a brand-new excise tax registration procedure for services most likely to be impacted by the broadened coverage of excise tax and recommends that organizations promptly commence their registration.

Implementing Excise Tax at a rate of 50% on carbonated drinks and 100% on tobacco products and energy beverages has actually been a great success. This success has actually been made evident by the high rates of compliance among services, facilitated by an easy and transparent technique. This decision has actually likewise witnessed numerous noticeable favorable outcomes, showing that the goals for which Excise Tax was presented have actually been mostly fulfilled.

Any organization in the UAE handling excisable products should examine if they require to be registered with the FTA and are required to submit and pay excise tax. It is the responsibility of businesses to guarantee that all regulative requirements significant to excise tax remain in place.

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