A Complete Guide to Excise Tax Registration in the UAE by Tulpar Global Taxation

As part of its efforts to promote a healthier lifestyle and reduce the consumption of harmful products, the UAE introduced excise tax in 2017. Excise tax is levied on specific goods that are considered harmful to human health or the environment. Businesses dealing with these products are required to register for excise tax with the Federal Tax Authority (FTA).

In this blog, we’ll take you through the excise tax registration process, which businesses are required to register, and how Tulpar Global Taxation can assist with ensuring compliance.

1. What is Excise Tax?

Excise tax is an indirect tax imposed on specific goods that are harmful to human health and the environment. In the UAE, excise tax rates are applied to the following products:

• Tobacco and tobacco products: 100% excise tax.
• Carbonated drinks: 50% excise tax.
• Energy drinks: 100% excise tax.
• Electronic smoking devices and liquids used in them: 100% excise tax.
• Sweetened drinks: 50% excise tax.

This tax is collected at various points of the supply chain, including importers, producers, and stockpilers. Businesses involved with the manufacture, import, or stocking of excise goods must register with the FTA.

2. Who Needs to Register for Excise Tax?

Businesses that are involved in the following activities are required to register for excise tax:

• Manufacturing excise goods in the UAE.
• Importing excise goods into the UAE.
• Stockpiling excise goods in the UAE under certain conditions.
• Releasing goods from excise tax designated zones (free zones) for consumption in the UAE market.

If your business is engaged in any of these activities, excise tax registration is mandatory. Failing to register within the specified timeline could result in penalties from the FTA.

3. Benefits of Excise Tax Registration

• Compliance with UAE Law: Registering for excise tax ensures that your business complies with UAE tax laws and avoids penalties.
• Transparency and Credibility: Being excise tax-registered enhances your business’s credibility with customers and partners, as it demonstrates that you are operating within legal boundaries.
• Access to Tax Refunds: Registered businesses can claim refunds on excise tax paid on goods that are exported or used in manufacturing other goods.

4. Steps for Excise Tax Registration

The excise tax registration process involves a series of steps to ensure that businesses are properly listed with the FTA. Here’s a breakdown of the process:

Step 1: Prepare Required Documents

Before starting the registration process, businesses must gather key documents, including:

• Trade license: Proof of your business’s legal entity.
• Details of the excise goods: Information about the products you manufacture, import, or stockpile.
• Ownership and shareholder details: Information about the business owners and partners.
• Warehouse information: If you are stockpiling goods, details of the warehouse location and capacity.

Step 2: Register on the FTA Portal

To begin the registration process, businesses must create an account on the FTA’s e-Services portal. This online platform is where you will submit your registration and manage all tax-related activities.

Step 3: Submit the Registration Form

Once registered on the portal, businesses need to fill out the excise tax registration form, providing detailed information about their activities and excise goods. Be prepared to include:

• The nature of your business (importer, manufacturer, or stockpiler).
• Details about the excise goods you handle, including their type, quantity, and value.
• Information about the business’s financial records, including profit statements and import data.

Step 4: Await Approval

After submitting the registration form, the FTA will review your application. If the application is complete and accurate, the FTA will issue you an Excise Tax Registration Number (ETRN), allowing your business to operate legally under the excise tax framework.

5. Post-Registration Obligations

Once your business is registered for excise tax, there are ongoing compliance requirements that must be met. These include:

• Excise Tax Returns: Registered businesses must file regular excise tax returns, usually on a quarterly basis, detailing the excise goods manufactured, imported, or released for consumption. This also involves calculating the excise tax owed and submitting payments to the FTA.
• Tax Invoicing: Businesses must issue tax-compliant invoices that detail the excise tax charged on goods sold to customers.
• Record-Keeping: Businesses are required to maintain detailed financial and inventory records for excise goods. This is essential for audits and tax filings and must be kept for at least five years.
• Stock Management: If you are stockpiling excise goods, regular inventory checks and updates must be submitted to the FTA.

6. How Tulpar Global Taxation Can Help

Excise tax registration can be a complicated process, especially for businesses new to the UAE tax landscape. Tulpar Global Taxation offers expert excise tax services to ensure that your business meets all regulatory requirements without unnecessary delays or errors. Here’s how Tulpar Global Taxation can support your business:

• Document Preparation: Our team helps you gather all the necessary documents and ensure they are submitted correctly to avoid registration delays.
• Registration Support: We guide you through the entire registration process, from filling out the forms to submitting them on the FTA portal.
• Compliance Assurance: Once registered, we provide ongoing support to help you file excise tax returns, manage tax invoicing, and maintain the required records for compliance.
• Consultancy Services: Our experts offer strategic advice on minimizing excise tax liability and maximizing your business’s efficiency.

7. Conclusion

Excise tax registration is a legal requirement for businesses in the UAE dealing with harmful products such as tobacco, energy drinks, and carbonated beverages. By registering with the FTA, businesses can ensure compliance, avoid penalties, and build credibility in the market.

If your business is involved in manufacturing, importing, or stockpiling excise goods, it’s crucial to register for excise tax as soon as possible. Tulpar Global Taxation offers tailored excise tax registration services to help you navigate this process smoothly and stay compliant with UAE tax laws. Contact us today to get started with your excise tax registration and ensure your business is fully compliant.