Excise Law In UAE: With the recent issue of Federal Decree-Law No. 7 of 2017 on Excise Tax by H.H. Shaikh Khalifa, the President of UAE, the Excise Law in UAE will be coming into force on 1st October 2017. Excise Tax is the tax charged on the excise goods. Excise goods are the goods that are determined to be subjected to tax as per the decision of the Cabinet upon the recommendation of the Minister.


UAE has taken a very good initiative to charge an excise tax on the goods that not only affect the health of the individuals but also have an impact on the environment.


The excise tax will be charged as follows on the below-mentioned products:


> 100% on cigarettes and energy drinks


> 50% on fizzy drinks


The cost of these products will be inclusive of the tax and thus leading to an increase in the price of the products, which will be becoming a source of income for the Government and discourage the users of these products from using it more extensively.


The Federal Decree-Law gives a detailed description of the scope, calculation, registration, payment, exemptions, refunds and violations & penalties regarding the Excise Tax in the UAE. The Excise Tax in UAE will require all the businesses dealing in the excise goods to maintain perfect accounting records, which should include –


> The records of all produced, imported and stockpiled excise goods


> The records of exported excise goods and proof of the export


> The record of all the stock levels which will include the lost or damaged items


> A tax record needs to be maintained for – a due tax on imported excise goods, due tax on exported excise goods, due tax on the stockpiled excise goods


However, excise tax need not be paid on exported excise goods. Even if it is paid in any transaction, it will be treated as a deductible tax as per Article (16) of the Federal Decree-Law No. 7 of 2017 on Excise Tax.


Whether it be the Excise Tax or the Value Added Tax (VAT), both the taxes in the UAE demand all the businesses to maintain a proper book of account that will help them in not only keeping a track of the transactions but also enable them to carry out all the necessary requirements in order to have compliance with the tax laws in the UAE.


ARC Associates is one of the leading accountants and auditors in the UAE having a dedicated team of chartered accountants and bookkeepers who have their expertise in the accounting software. To keep your books of accounts updated and well maintained, please contact ARC Associates for the best accounting services in UAE.


For a no-obligation initial consultation, please contact:

Mr. Reyees. K.P | Director

ARC Associates

Tel: +971 4 4431604

PO BOX 390831

Mob: 055 4874391

B2B Tower, Office 1213

Business Bay

Dubai, UAE

Email: info@arcauditing.ae