In 2017, the UAE introduced an ‘excise tax’ on certain products which are deemed to put the health of the people and the environment at risk. Effectively overnight, the price of tobacco-related products, energy drinks and excessively sugary sweets rose by 100%, in addition to sugary carbonated drinks by 50%. More recently, it was announced that electronic smoking devices (and related products) would also be subject to the excise tax as of January 2020.
Alongside the recent additions, the UAE’s Federal Tax Authority (FTA) has unveiled a new electronic system specifically designed for the registering of these excise goods in line with the new GCC reporting requirements which require all necessary documents available when submitting a registration request. These documents include products details, ingredient lists, marketing information and the retail price of the product.
Various new manuals and guides have been shared in the region with the hope of raising awareness among taxpayers and provides step-by-step instructions on how to register excise goods in the new system.
The FTA confirms that any person who produces or imports an excise good which is to be sold in local markets is subject to the tax and that there is no threshold for this excise tax, meaning any business with activities involving excise goods is required to register in the new system regardless.