VALUE ADDED TAX
What We do
Excise tax services in Dubai are essential for businesses dealing with specific products that are considered harmful to health or the environment. Excise tax in the UAE is an indirect tax introduced in 2017, applying to goods such as carbonated drinks, energy drinks, tobacco products, electronic smoking devices, liquids used in these devices, and sweetened beverages. The tax rate varies: 50% for carbonated and sweetened drinks, while tobacco products, energy drinks, electronic smoking devices, and their related liquids are taxed at 100%.
Who Needs Excise Tax Services?
Businesses involved in the following activities are required to register for excise tax in the UAE:
- Importing excise goods: Bringing excise goods into the UAE.
- Producing excise goods: Manufacturing excise goods for consumption within the UAE.
- Stockpiling excise goods: Holding a reserve of excise goods in certain circumstances.
- Operating warehouses or designated zones: Managing areas where excise goods are produced, stored, or handled.
These entities must register with the Federal Tax Authority (FTA) at least 30 days before commencing operations involving excise goods.
Timeframe for Compliance
Once registered, businesses are obligated to file excise tax returns by the 15th day following the end of each tax period, which is typically monthly. For example, for a tax period ending on July 31, the return must be filed by August 15. Timely filing and payment are crucial to avoid penalties.
Pricing of Excise Tax Services
While the FTA does not charge a fee for excise tax registration, businesses may incur costs related to compliance, such as:
- Professional advisory services: Assistance with registration, return filing, and compliance can vary in cost based on the service provider’s expertise and the complexity of the business operations.
- Penalties for non-compliance: Failure to register or file returns on time can result in significant fines. For instance, late registration can attract a penalty of AED 10,000, and failure to file returns on time may result in a fine of AED 1,000 for the first offense, increasing with subsequent offenses.
Engaging experienced tax professionals can help businesses navigate the complexities of excise tax regulations, ensure compliance, and avoid potential penalties.
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