ABU DHABI 1 December 2019: The Federal Tax Authority (FTA) has implemented Cabinet Decision No. (52) of 2019 on Excise Goods, Excise Tax Rates, and the Methods of Calculating the Excise Price, from today (Sunday, December 1).
The decision calls for expanding the scope of Excise Tax to include sweetened drinks, electronic smoking devices and tools, and the liquids used in these devices, adding these items to the list of products that have been subject to Excise Tax since it first came into effect in October 2017, which included tobacco and tobacco products, energy drinks, and carbonated beverages.
Four months ago, the FTA began accepting applications to register from producers, importers, and stockpilers of sweetened drinks, electronic smoking devices and tools, and the liquids used in these devices.
The FTA has partnered with Customs Departments in all seven emirates, as well as with authorised laboratories, to coordinate and monitor the circulation of goods, ensure seamless customs procedures around the new Cabinet Decision, and assess the level of compliance with said decision in the market.
Registration requirements for Excise Goods include the product details, ingredient list, marketing campaigns including photographs and videos, a lab analysis report if needed, and price details according to the retail price guide (or price details in the relevant country for products sold outside the UAE).
The guides and manuals detail the methods and standards for implementing Excise Tax on sweetened drinks, electronic smoking devices and tools, and the liquids used in these devices. They also offer a simple break-down of the steps needed to register both Taxable Persons and Excise Goods, as well as a schedule showing registration deadlines.
Sweeteners
The Federal Tax Authority noted that Cabinet Decision No. (52) of 2019 on Excise Goods, Excise Tax Rates, and the Methods of Calculating the Excise Price considers sweetened drinks to be any beverage where any type of sugar or sweeteners are added, whether it is supplied ready-to-consume as a drink, or in the form of concentrates, powders, gels, or solutions that can be converted into sweetened drinks. The new regulation defines sugar as any type of sugar determined under Standard 148 of the GCC Standardisation Organisation as ‘sugar’, while sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardisation Organisation as ‘sweeteners authorised for use in food products’.
Meanwhile, the decision identifies electronic smoking devices as any e-cigarette devices, tools, and the like, while electronic smoking liquids include all liquids used in electronic smoking devices, whether or not they contain nicotine or tobacco. The Authority noted that as per the Decision of Minister of Finance No. (236) of 2019, Excise Tax will be collected on electronic smoking devices and liquids, according to the Customs HS codes related to e-cigarettes, e-shisha, and other related products.
