DUBAI: The Federal Tax Authority (FTA), the government entity responsible for administering, implementing, and collecting federal taxes in the United Arab Emirates (UAE) is set to launch the registration process for excise tax from Sept 17. The decision comes ahead of Oct 1 launch of nation-wide excise taxes and in an effort to guide and assist businesses in the early stages of tax compliance. Businesses will be required to register via the FTA’s interactive website, which was designed in accordance with top international standards to facilitate registration for taxable persons and entities on a 24/7 basis. The FTA is committed to assisting the business sector in the UAE to harmonise its financial and technical systems to ensure its readiness to comply with the country’s planned tax regulations and procedures. This covers the imminent excise tax in October 2017, as well as the Value-Added Tax (VAT) set to be launched in early January 2018.
“The registration process for businesses eligible for excise tax is an important and critical juncture in implementing the federal tax system in the UAE,” stressed FTA Director General Khalid Al Bustani. “It is the first step towards complying with the tax procedures and laws, and an opportunity for UAE-based businesses to adapt their internal financial and administrative systems to the advent of this major step forward for the maturing national economy.” “With that in mind, we were adamant to employ the very best in international standards and best practices, facilitating easy electronic registration through our website, which doubles as a source of information and a major communication channel between the Authority and individuals and entities subject to taxation,” Al Bustani added. “The Authority seeks efficiency and transparency as we implement the tax system. Therefore, we offer our full support and guidance to UAE-based businesses throughout the registration process.”
As of October 1, excise tax will go into effect at a rate of 50% on soft drinks and 100 percent on tobacco and energy drinks. Soft drinks include all carbonated/aerated beverages, with the exception of non-flavoured aerated water, as well as any concentrates, gels or extracts that can be processed into soft drinks. Energy drinks, meanwhile, include beverages that may contain stimulants or substances that induce mental or physical stimulation, including but not limited to: caffeine, taurine, ginseng and guarana, as well as any substances with similar effects. Excise taxes are payable by the individual or entity producing or importing products eligible for the tax. It also affects individuals and entities that stock these products if they have not already been taxed. In the event that excise goods are released from a designated zone (and where payable tax has not been paid previously), the onus is on the warehouse keeper to pay the tax.
