Excise tax compliance is a crucial aspect of doing business in the United Arab Emirates (UAE). Understanding and adhering to the excise tax regulations is essential to avoid penalties and fines imposed by the Federal Tax Authority (FTA). This article aims to provide an overview of the dos and don’ts of excise tax compliance under UAE tax laws, along with the potential consequences of non-compliance.
– Federal Law No. 1 of 1972 on the Competencies of the Ministries and Powers of the Ministers, and its amendments;
– Federal Law No. 11 of 1981 on the Imposition of a Federal Customs Tax on Imports of Tobacco and its Derivatives, and its amendments;
– Federal Law No. 26 of 1981 on the Commercial Maritime Law, and its amendments;
– Federal Law No. 5 of 1985 promulgating the Civil Transactions Law, and its amendments;
– Federal Law No. 3 of 1987 promulgating the Penal Law, and its amendments;
– Federal Law No. 10 of 1992 promulgating the Law of Evidence in Civil and Commercial Transactions, and its amendments;
– Federal Law No. 11 of 1992 promulgating the Civil Procedure Law, and its amendments;
– Federal Law No. 18 of 1993 promulgating the Commercial Transactions Law;
– Federal Law No. 8 of 2004 on the Financial Free Zones;
– Federal Law No. 1 of 2006 on Electronic Commerce and Transactions;
– Federal Law No. 2 of 2008 on the National Societies and Associations of Public Welfare;
– Federal Law No. 15 of 2009 on Combating Tobacco, and its amendments;
– Federal Law No. 1 of 2011 on the State’s Public Revenues;
– Federal Law No. 8 of 2011 on the Reorganization of the State Audit Institution;
– Federal Decree-Law No. 8 of 2011 on the Rules of the Preparation of the General Budget and Final Accounts;
– Federal Law No. 4 of 2012 on the Regulation of Competition;
– Federal Law No. 12 of 2014 on the Organization of the Auditing Profession;
– Federal Decree-Law No. 7 of 2017 and its amendments – Unofficial translation
– Federal Law No. 2 of 2015 on Commercial Companies;
– Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments;
– Federal Law No. 7 of 2017 on Tax Procedures, and its amendments; and
– Pursuant to what was presented by the Minister of Finance and approved by Cabinet,
It is important to consult the specific provisions and amendments of each law to ensure accurate compliance with UAE excise tax regulations.
Penalties for failure to comply with UAE excise tax laws vary depending on the specific violation. Here are the potential penalties associated with non-compliance. On Violations and Administrative Penalties related to the Implementation of
Federal Decree-Law No. 7 of 2017 on Excise Tax:
Potential penalties associated with non-compliance in AED
A retail store in the UAE failed to display prices inclusive of tax on their products, violating the requirement set by the Federal Tax Authority
A company in the UAE violated the excise tax laws by failing to comply with the conditions and procedures for transferring excise goods from one designated zone to another. They also neglected to follow the proper mechanisms for preserving, storing, and processing the excise goods, leading to non-compliance with the regulations set by the authorities.
The penalty shall be the higher of 50,000
or 50% of the Tax, if applicable, chargeable
on the goods in relation to the violation
A taxable person operating in the UAE failed to provide the tax authority with the required price lists of the excise goods they produce, import, or sell. This failure to comply with the regulations resulted in a violation of the excise tax laws, as it hindered the authority’s ability to monitor and verify the correct taxation of these goods. The taxable person may face penalties and fines for this non-compliance.
5,000 for the first time.
10,000 in case of repetition
Compliance with excise tax laws is essential for businesses operating in the UAE. By following the dos and avoiding the don’ts outlined in this article, businesses can ensure adherence to excise tax regulations and minimize the risk of penalties and fines. It is recommended to seek professional advice and stay updated with the latest developments in UAE tax laws to maintain excise tax compliance effectively.
This article was published on 04 August 2023
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