Monday, 23 October 2017

UAE tax, excise tax procedures: Mohammed issues decree



His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued Decree No. 36 of 2017 on the Executive Regulations of Federal Law No. 07 of 2017 on Tax Procedures.

In addition, Sheikh Mohammed issued Ministerial Decree No. 38 of 2017 on the value of the tax imposed on products which are subject to the excise tax.

Purpose of levying excise tax

According to the official portal of the UAE government, the excise tax is being levied to reduce consumption of unhealthy and harmful commodities while also raising revenues for the government that can be spent on beneficial public services.


Rate of excise tax


The rates of excise tax in the UAE are:

· 50 per cent for carbonated drinks

· 100 per cent for tobacco products

· 100 per cent for energy drinks.

What is excise tax?

The excise tax is a form of indirect tax levied on specific goods. These goods are typically those that are harmful to human health or the environment. These goods are referred to as "excise goods". When considering whether a product is an excise good, the following definitions apply:

· Carbonated drinks include any aerated beverage except for unflavoured aerated water. Also considered to be carbonated drinks are any concentrations, powder, gel, or extracts intended to be made into an aerated beverage.

· Energy drinks include any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that provide mental and physical stimulation, which includes without limitation: caffeine, taurine, ginseng and guarana. This also includes any substance that has an identical or similar effect as the aforementioned substances. Also considered to be energy drinks are any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink.

· Tobacco and tobacco products include all items listed in Schedule 24 of the GCC Common Customs Tariff.

How will it affect consumers?

Consumers will need to pay more for goods that are harmful to human health or the environment.

His Highness also issued Decree No. 41 of 2017, on the definition of Community Service Work. The decree shall become effective one month after being published in the Official Gazette. 

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