Ministry issues executive ruling on excise tax

DUBAI / WAM

The Ministry of Finance (MoF) published Cabinet Decision No. (37) of 2017 on the Executive Regulation of the Federal Decree-Law No. (7) of 2017 on Excise Tax, as well as Cabinet Decision No. (38) of 2017 on Excise Goods, Excise Tax Rates and the Method of Calculating the Excise Price, the latter of which will
add 50 percent to the price of carbonated
beverages and 100 percent to that of tobacco products and energy drinks.
The announcement comes after both decisions were ratified by the Council of Ministers in its meeting on September 13, which was chaired by Vice President and Prime Minister of UAE and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum.
Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs, said, “Today’s Cabinet decisions, which detail the Executive Regulations of the Excise Tax law and specify the taxable goods, tax rates and the method of calculating the tax, mark the culmination of our preparation phase. As of October 1, we will begin implementing the first phase of the tax system, by applying Excise Tax – at a rate of 50 percent to 100 percent – on designated products that are deemed harmful to people’s health.”
“We have successfully set up the adequate legislative and administrative environment for launching the tax system,” Al Tayer continued.
The legislation goes on to clarify the controls and conditions required for applying for Tax registration, such as the right of the FTA to impose on a person a financial guarantee for Tax Registration purposes. If a Taxable Person fails to notify the Authority of their obligation to register for Tax, the law allows the FTA to register them with effect from the date the
Decree-Law comes into force.

Cabinet Decision No. (37) of 2017 on the Executive Regulation of the Federal Decree-Law No. (7) of 2017 identifies the Person liable to pay Tax where the Person who conducted the activity (importing, producing or stockpiling of Excise Goods) has not settled the tax, as a Person in the supply chain, an investor with a financial interest in the supply chain, or the owner of the Excise Goods. In certain cases (detailed within the law), the onus may be on the warehouse keeper to pay the tax, where Excise Goods have been released from a Designated Zone and the Person responsible for the Tax has failed to account for it to the FTA.