GCC Indirect Tax Weekly Digest

UAE developments

FTA publishes updated version of Taxable Person guide for Excise Tax

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published an updated version of its Taxable Person guide for Excise Tax.

The guide has been substantially updated to address recent significant developments relating to Excise Tax in the UAE, including the expansion of the scope of Excise Tax, and new requirements related to declarations and reporting.

 Specifically, the guide has been updated with additional information regarding:

• Excise goods and applicable rates (including products newly subject to Excise Tax such as sweetened drinks and electronic smoking devices/liquids);
• Determining the Excise Price for tobacco products;
• Declarations and reporting requirements;
• Voluntary disclosures; and
• The Digital Tax Stamps scheme.

Further, criteria has been added to differentiate between carbonated drinks and energy drinks. The guide also states that where a product meets the definition of more than one category of Excise goods, it will be classified as the Excise good which would be subject to the highest Excise tax rate and will be taxed at that rate.

FTA publishes Cabinet Decision on Excise Price of tobacco products

The FTA has published Cabinet Decision No. 55 of 2019 (the Decision) on the Excise Price for Tobacco Products.

The Decision sets out the Excise Price for Tobacco Products as follows:

• No less than AED 0.40 per cigarette; and
• No less than AED 0.10 per 1 gram of water pipe tobacco, or ready to use tobacco or other similar products.

The Decision sets the minimum Excise Price for the Tobacco Products listed. Where the designated retail sales price less the Tax included is lower, the Excise Price published in the Decision will apply.

The Decision indicates that the changes will come into effect before 1 January 2020, on a date to be specified in a future Decision issued by the Minister of Finance.

For more information about the new Decision, please refer to Deloitte’s separately published alert.

VAT refunds for foreign businesses deadline approaching 

The deadline for non-resident businesses to submit requests for Value Added Tax (VAT) refunds in the UAE is fast approaching.

 Applications must be submitted by 1 October 2019 to the UAE FTA to recover VAT incurred during the 2018 calendar year. Foreign businesses should assess whether they qualify for a refund and start calculating the amount of UAE VAT they can reclaim.

 This scheme is open to businesses which meet the following criteria:

• No place of establishment or fixed establishment in the UAE;
• Not a taxable person in the UAE;
• Not carrying on a business in the UAE; and
• Carrying on a business and registered for VAT (or equivalent) overseas.

For a list of eligible countries, please see Appendix A of the FTA’s user guide on VAT refunds for business visitors.

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.