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What we consume on a daily basis is one of the keys to a healthy lifestyle. The UAE Government imposed an excise tax on October 2017 to safeguard the health of its residents. Limiting the intake of specific products that are regarded harmful to our health and discouraging consumers from consuming it. Excise tax registration in UAE is mandatory for the businesses that import, produces, or stockpiles excise goods or release them from a designated zone in the UAE.

Alliance Prime is offering the best excise tax registration services in Dubai. Businesses who are involved in these activities or trade these goods must register for Excise Tax in the UAE as the tax is charged at the time of import or manufacturing.

The following goods are currently subject to excise tax:

• tobacco and tobacco products (Cigarettes, cigars, and other tobacco-related items fall under this category)
• liquids used in electronic cigarette equipment and devices
• tools and electronic cigarette gadgets
• carbonated beverages
• energy beverages
• sweetened beverages

 

Who is liable for excise tax registration in the UAE?

• Importer of excise goods into the UAE
• Producer of excise goods in UAE
• Warehouse Keeper of Excise Goods in UAE
• Stockpiler of excise goods in the UAE

 

When to get excise tax registration TRN?

To register for UAE Excise Tax, businesses intend to import, produce, or stockpile of excisable goods. They must register within thirty days before the start of operation or the law’s effective date. If a business does not regularly import or release excise goods from DZ, it may be eligible for excise tax registration i.e., no more than once in a 6-month period, or 3 times in a 24-month period.

Deadline for Excise Tax Registration

There is no registration threshold for excise tax; therefore, any corporation that intends to be involved in any of the activities listed above must register prior to the date of introduction. Excise duties on the expanded list have been effective from 1st December 2019 and full compliance on registration is mandatory. Tax Registration will avoid all stakeholders any fines or obstacles that may come up from late or failed registration.

 

Providing Excise Tax Consultancy and Compliance

Alliance is dedicated to assisting businesses that have trouble adhering to FTA rules and laws by offering them technical advice and knowledge. Our experience and understanding help businesses get an unbiased view of the issues they are dealing with and provide them with solutions.

 

Excise Health Check/Pre-Tax Audit

Conducted by the Federal Tax Authority to determine whether the taxpayer is following tax laws and to ensure that the tax liability has been paid within the specified deadline.

 

How can we help?

Alliance will assist in organizing all required documentation that the FTA is requesting and ensure that everything complies with FTA law and regulations. Our company will help you find any errors or mistakes in your excise return with the support of our knowledgeable and experienced team, who have years of experience, in order to reduce the number of fines and penalties.

 

Tax Disputes Resolution Committee (TDRC)

Majority of applications for reconsideration of FTA penalties are rejected. The taxpayer has the right to disagree with the FTA’s decision and take their appeal to Tax Disputes Resolution Committee (TDRC) formed by Ministry of Justice.

How can we help?

In the event that the reconsideration application is rejected and the TDRC matter moves forward, our firm will respond or make submissions on the Company’s behalf and provide any necessary support.

 

Refund of excise taxes and a voluntary disclosure

• A taxable person may be eligible to apply for a refund position when filing an excise return and the value of the deductible is more than the value of excise tax due. When excise tax is already paid on an excise good and then exported outside the UAE.
• When the Taxpayer submitted an incorrect or omitted information for the Excise Return, Refund Application, or Tax Assessment. They can notify FTA by submitting Voluntary disclosure

How can we help?

• We will be preparing voluntary disclosure form to rectify the errors made in the filed excise return.
• We will be Preparing and submitting the VD on the company’s behalf and assisting them by responding to the FTA’s additional requirements.

 

Tax Agent and Tax Agency

Businesses can simplify the process of fulfilling their tax obligations in the UAE by working with an approved tax agent or tax agency.

How can we help?

As an approved tax agent and agency, Alliance can assist the taxpayer by communicating with FTA about all tax duties and filing any requests for the FTA to review its decisions. Representing the company during any audits and from the FTA.

 

Tax Assessments

The excise tax assessment, the most complex and challenging indirect tax in the United Arab Emirates, and carefully monitored by the Federal Tax Authority. In the first half of 2022, the FTA conducted inspections of businesses that deal with excise goods. Businesses have committed thousands of violations, including failure to register for excise tax, failure to comply with excise drink package requirements, packaging illegal cigarettes and tobacco goods without a digital stamp, and many more.

How we can help?

Issues and liabilities may unavoidably develop following an Excise inspection. Our firm can offer guidance on how to deal imposed penalties and keep them to a minimum as possible and also assist the taxpayer in reviewing the excise tax assessment made by the FTA.

Excise Tax Registration & Amendment

Since there is no threshold for for excise tax registration, everyone who engages in any of the below activities required to register for excise tax:

• 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.
• The release of excise goods from a designated zone

 

Amendment:

You must notify the FTA by amending your records within (20) working days of the occurrence of any events that will affect the Excise Tax records retained by the FTA, as specified during your registration, if you are registered for Excise Tax.

Designated-Zone Registration/Renewal

A designated zone Warehouse can be set up any place in UAE after obtaining approval from the federal tax authority a company is also required a Warehouse keeper  to supervise the activities of the proposed DZ registrations your warehouse as the designated zone will benefit your company as excise tax payment will be deferred till goods are released to the mainland, it avoids the unnecessary delay  in claiming a refund on that goods that are exported and you can avail the benefit of waiver of excise tax on lost and damaged goods approved by FTA unlike when it’s lost in the mainland.

We can help with the Registration of Warehouse Keepers & Designated Zones. Our team will walk you through the process, and our subject matter experts will respond to all of your questions along the way. With our expertise and experience in all types of excise law, you can take advantage of the exemptions from excise laws in the designated zones.

DZ Renewal

The federal tax authority has published a public clarification regarding the renewal of designated zone registration for excise tax purposes. The Designated Zone registration is valid for 12 months and must be renewed every year.

Warehouse keeper must follow below procedures to maintain its designated zone status

*Examine the designated zones’ registration expiry dates

*For each designated zone that needs to be renewed, submit the designated zone renewal (amendment) form and pay the renewal fee separately;

*Examine the quantity and nature of excise items held in the specified zone so that the FTA can assess the value of the existing financial guarantee and, if necessary, direct the warehouse keeper to submit an updated financial guarantee.

 

Excise Tax Deregistration

Any company that has registered for excise can request excise tax deregistration within a certain time frame from the date he is no longer engaged in taxable activities. i.e., import, production, and stockpiling of excise goods in the UAE. In order to deregister, a taxable person must be up to date with all tax return submissions and payments of tax and penalties. It is important to note that fines apply if an application is not submitted to Timeframe.

 

Excise Product Registration & Amendment (RSP)

Excise Products that are considered to be harmful to human health must register to FTA through the government body “Brandysnc.” Products such as carbonated beverages, energy drinks, tobacco and tobacco products, electronic cigarette tools and devices, liquids used in such tools and devices, and sweetened beverages.

How we can help?

Our company will handle every aspect of registration, including obtaining the Municipality Certificate (Food Label Assessment and MOIAT Conformity Certificate + Schedule of Certification). Advice the client regarding the type of registration they should undertake.

 

Stockpile Calculation

Before the first implementation of the excise tax in October 2017, Businesses that held excise goods in free circulation in the UAE such as carbonated beverages, energy drinks, tobacco, or tobacco products were obligated to disclose the quantity of their products to the FTA and pay the excess excise tax.

Similarly, if someone has Sweetened beverages, electronic smoking devices and items in their possession as of December 1st, 2019, the person should consider whether he would qualify as a stockpiler or not for Excise Tax purposes and to pay Excess Excise Tax on the stock on hand on 1 December 2019.

How we can help?

An experienced team of highly skilled specialists and auditors in the UAE.  Our company is committed to assisting businesses in every phase of declaring their goods to the FTA without generating any issues or penalties.

 

Why Choose Alliance Prime Tax Consultants and Accountants?

• Expertise: Alliance Prime’s experts have a thorough understanding of UAE Excise Tax legislation thanks to their years of experience in tax consultancy. With precise, open financial management in line with the highest international standards, we are your partner in expanding your company.
• Efficiency: We make sure the registration procedure is quick and hassle-free, saving you time and energy. Since tax collection is not the goal of tax policy but merely a duty, reducing the administrative burden benefits both taxpayers and the economy.
• Compliance: Following the laws and regulations imposed by an authority has become vital. A business should select a reliable organization that provides regulatory tax and compliance services if it wants to avoid future complications. Our team makes sure that your company complies with all Excise Tax rules, minimizing the possibility of fines.
• Customized Solutions: We tailor our services to meet your specific business needs, providing personalized solutions.
• Ongoing Support: To understand the taxation system of the nation where you live and operate, it is advantageous for any business to engage a reputable, knowledgeable tax adviser. Alliance Prime Tax Consultants and Accountants offer continuous support and guidance to ensure ongoing compliance.

Excise Tax registration becomes a simple process with Alliance Prime Tax Consultants and Accountants on your side. Allowing you to concentrate on what you do best in running your business.

In conclusion, businesses that produce or sell excisable items or engage in excisable activities must register for excise tax in the United Arab Emirates. You can guarantee compliance and prevent any penalties by being aware of the requirements and strictly adhering to the excise tax registration process. If you need help, think about working with professionals like Alliance Prime Tax Consultants and Accountants.

 

Calculate Excise Tax in the UAE: Unveiling Methods, Rates, and Implementation Challenges

Since October 2017, the UAE has instituted an excise tax regime that indirectly influences specific goods across production, importation, and sale. This tax launch has dual objectives: generating government revenue and discouraging consumption of harmful items such as cigarettes, fizzy drinks, and energy beverages. In this article, we delve into the various avenues to calculate excise tax costs, explore the specific tax rates in play, and shed light on the UAE’s taxation landscape.

Navigating Compliance and Calculations To comply with excise tax regulations, registered UAE businesses must consistently file returns and pay relevant excise tax on their liable goods. Precise excise tax calculation is paramount to ascertain a company’s financial responsibility. Failure to register or fulfill tax obligations can result in fines and penalties imposed by the Federal Tax Authority (FTA).

Excise Tax Rates in the UAE The UAE applies excise taxes to several products and services, encompassing tobacco, energy drinks, and sugary beverages:

• Tobacco Products: A substantial 100% of the item’s retail price.
• Energy Drinks: Also at an elevated 100% rate, reflecting their stimulating properties.
• Carbonated Drinks: Attracting a 50% excise duty to encourage healthier beverage choices.

Methods of Excise Tax Calculation in the UAE Calculating excise tax in the UAE involves two main methods: the Specific Method and the Ad Valorem Method.

1. Specific Method: This involves applying a fixed tax rate per unit of a product. For instance, energy drinks may carry a specific tax rate per milliliter, providing clarity for both businesses and consumers regarding the precise tax amount per unit.
2. Ad Valorem Method: This method calculates the excise tax based on a percentage of the product’s value. High-end automobiles might face a 50% excise tax based on retail value, while jewelry could be subjected to a 5% tax based on its retail price. The Ad Valorem Method requires establishing the goods’ value to determine taxable amounts.

Illustrating Excise Tax Calculation To provide a clearer picture, let’s explore examples of excise tax calculation using both methods:

• Specific Method: If a pack of cigarettes costs AED 20, the excise tax would be AED 8, resulting in a total price of AED 28.
• Ad Valorem Method: For an energy drink priced at AED 10, the excise tax would be AED 20 (100% of AED 10).

Challenges in Implementing Excise Tax in the UAE The primary challenge in enforcing excise tax lies in cross-border transactions. Ensuring compliance and collecting tax in such scenarios can be intricate.

Furthermore, SMEs might face challenges in dealing with excise tax adoption. They might opt to pass on costs to customers, potentially impacting pricing, or experience reduced profits. Striking a balance between compliance and business sustainability becomes a crucial endeavor.

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Why is Alliance Prime the best Excise Tax Consultancy in Dubai?

It is essential that those who are liable to taxation obtain advice from qualified tax advisors in the UAE. These consultants can contribute to the smooth execution of tax legislation and standards. Significant fines may be assessed for breaking these rules.

As an Excise Tax Consultant in Dubai, Alliance Prime can be a great help in understanding, calculating and filing excise taxes. Our team of experts is committed to giving advice that is specifically catered to your needs. Contact our team for more information if you have any questions or need assistance with excise tax or other tax-related issues. We are available to guide you through the complexities of taxation and verify that you are following all relevant rules.

To to Book a Free Consultation, contact us on: at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com