Excise Tax
The excise tax is levied on three types of goods, with the following tax rates applied to each:
Carbonated Beverages:
The excise tax on carbonated beverages is 50%. Any aerated beverage with added sugar or sweeteners falls into this category.
Energy Drinks:
Energy drinks are subject to a 100% excise tax. This category includes beverages containing stimulants like caffeine, taurine, or guarana.
Tobacco and Tobacco Products:
Depending on the type of product, tobacco and tobacco products are taxed at varying rates. The following are the rates:
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Cigarettes: A specific excise tax rate of AED 0.4 per cigarette or AED 40 per 1,000 cigarettes, whichever is higher.
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Cigars: A specific excise tax rate of 100%.
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Other Tobacco Products: A specific excise tax rate of 100%.
​To pay the excise tax in Dubai, UAE, you must follow the Federal Tax Authority's (FTA) instructions. Here's a quick rundown of the stages required for paying excise tax:
Register for Excise Tax:
If you manufacture, import, or keep excise items, you must first register for excise tax with the FTA. This can be accomplished by submitting an online application using the FTA's e-Services site.
Obtain a Tax Registration Number (TRN):
Once your registration application is granted, the FTA will provide you with a Tax Registration Number (TRN). This TRN will be required for all excise tax transactions.
Maintain Records:
As a registered taxpayer, you must keep accurate records and papers pertaining to your excise items, such as invoices, receipts, and customs declarations.
Determine Your Tax Due:
Based on the applicable tax rates, calculate your excise tax due for your goods. The tax burden varies based on the category of commodities (carbonated beverages, energy drinks, tobacco, and so on).
Prepare and Submit Excise Tax Returns:
Prepare your excise tax returns using the FTA's web portal depending on the tax periods established by the FTA (usually quarterly). Include correct information about your taxable transactions, such as the amount and value of excisable products.
Pay the Excise Tax:
The FTA will determine the excise tax amount owed after you submit your tax return. Make the payment by the deadline using one of the various payment options, such as online banking or the e-Services site. The money will be credited to your tax account by the FTA.
Records and Compliance:
Keep all records, tax returns, and payment receipts for at least five years. Maintain continuous compliance with excise tax requirements, including timely return and payment filing.