Excise Tax Scope, Calculation and Obligations

Implementation and Extent of Taxation

1. This Decree-Law’s provisions are applicable to Excise Goods as outlined by a Cabinet Decision proposed by the Minister.
2. Taxation shall be levied on the following activities concerning Excise Goods:
   • The production of Excise Goods within the State when such production is part of a business operation.
   • The importation of Excise Goods.
   • The release of Excise Goods from a Designated Zone.
   • The stockpiling of Excise Goods within the State, where such stockpiling is part of a business operation.

Tax Calculation

Upon the Minister’s recommendation, a Cabinet Decision will be issued to specify the tax rates applicable to Excise Goods and outline the method for calculating the Excise Price. It is important to note that the tax rate should not surpass 200% of the Excise Price of the respective Good.

Tax Obligations

The obligation to pay taxes applies to:

• Individuals conducting any activities outlined in clause (2) of Article (2) of this Decree-Law;
• Individuals engaged in activities mentioned in clause (2) of Article (2) of this Decree-Law, in the event that the original activity executor fails to fulfill their tax payment obligation, as per the Executive Regulation of this Decree-Law;
• Warehouse Keepers, when Excise Goods are released from a Designated Zone without the prior payment of the applicable tax, in accordance with the guidelines specified in the Executive Regulation of this Decree-Law.

The following are exceptions to the provisions in clause (1) of this Article:

• Individuals importing Excise Goods of a value less than that specified in Customs Legislation, provided such goods accompany the individual within the context of an international journey and are intended for non-commercial purposes.
• Stockpilers, subject to meeting the conditions outlined in the Executive Regulation of this Decree-Law.

Summary

This decree-law outlines the implementation and scope of tax on Excise Goods, specifying activities subject to taxation, including production, import, release from a Designated Zone, and stockpiling. A Cabinet Decision, prompted by the Minister, will establish tax rates and methods for calculating the Excise Price. The tax obligation falls on individuals or entities engaged in these activities, and the responsibility extends to warehouse keepers in certain cases. Exemptions are outlined, such as for individuals importing Excise Goods for non-commercial use and for stockpilers meeting specified conditions.

Disclaimer: The Content offer general guidance and should not be considered legal, financial, or tax advice. Consult qualified professionals for personalized guidance. While efforts have been made to ensure accuracy, no guarantee is provided for completeness or applicability to individual situations. Users are responsible for their interpretation and actions based on this information, at their own risk.

For understanding more about VAT Updates, Tax Law and Registration reach out to us on: info@acme-group.me | +971527972066.

This article was published on 11 March 2024.