Excise Tax

While the UAE offers low tax rates, navigating the complex tax regimes can be challenging for many businesses. Without the time to go through all the Federal Tax Authority (FTA) rules, you might end up paying more tax than necessary.

In the UAE, excise tax is applied to both imported and domestic goods that are harmful to human health or the environment, such as tobacco and carbonated drinks. Businesses must manage production, inventory, tax declarations, and compliance to avoid severe penalties for non-compliance.

The UAE introduced excise tax in 2017 on specific products, and in 2019, the tax was expanded to cover more items. This shift has impacted businesses significantly, affecting their margins, pricing, cash flows, documentation, bookkeeping, IT systems, product demand, contract terms, and compliance requirements.

ccording to the new Public Clarification, a warehouse keeper is an individual responsible for managing or planning to manage a Designated Zone for excise tax purposes. Warehouse keepers are legally required to register with the FTA in order to supervise Designated Zones, which must also be registered before beginning operations.