From October 1, 2017 the new Excise Tax law of the UAE was introduced. Certain goods which are harmful for human consumption or environment are selected for imposing Excise Tax. Carbonated drinks, energy drinks, and tobacco are selected; and excise tax for carbonated drinks shall be at the rate of fifty (50) percent, and for energy drinks and tobacco products hundred (100) percent.
Businesses engaged in the above goods in the UAE; including its import, or production and release for consumption, or stockpiling, or any person responsible for overseeing a warehouse or designated area used to stockpile, shall be responsible to register with the Federal Tax Authority (FTA). Any person currently engaged in the above businesses shall ensure registration through the FTA website.
FTA shall be auditing businesses, including retailers, to ensure registration for imposing excise tax, and penalties shall be applied for delayed registration or payment. Businesses are advised to conduct excise tax impact assessment to determine the commercial implications of excise tax.